Both gold and silver are staying in bearish territory and diving to their lowest levels in years due to the recent upturn of the US Dollar.
Even before the dollar turned around, we already warned readers about silver and gold in April:
“The direction that the US dollar takes through the rest of the year might determine where these two precious metals head in 2014. The dollar breaking down to lower levels will help gold and silver turn upward. However, we see the dollar more likely to go higher, having a depressing effect on gold and silver prices.”
Finally, on the first week of August, enough signals were given by the dollar to expect these two precious metal to get hit.
Today, silver is very close to a four-year low. Silver was trading sideways earlier this year, building support as the dollar weakened. Now that the dollar is strong again, silver is diving into its support level, and unless the dollar weakens, the arrow is pointing down for silver.
The picture looks similar for gold. The metal is near a key support level that, if broken, could signal a significant move downward.
What This Means For Metal Buyers
We will see if gold and silver are able to bounce back up from their support levels. It would be hard to see these two metals surging in the face of a strong dollar. Today, the picture looks bearish for them and if they fall below their support levels we would expect further downward movement.