Silver Price Pushed Down 2.5% In 30 Minutes

At 8 o’clock sharp New York time, the price of silver took a dive of 2.5% in a matter of minutes. As the chart below shows, one 30 minute bar had a high $19.20 and low of $18.70. The chart shows that the price went down on very big volume. Apparently a big seller was in a hurry to move the price, as the price was pushed down to exactly the bottom (silver has touched 18.70 three times in the last 12 months).

Meantime, the price has recovered, as the chart shows. However, silver is hovering at a critical price level, as we’ll explain below.

This is the silver price chart for July silver, on the 30 minute chart, courtesy of Barchart.

silver_price_spike_1_May_2014

Up until now, silver has held at $18.70. From a chart perspective, however, three touches make an asset “ripe” to start trending. That’s why we consider this price level critical, and, maybe, today’s seller as well.

Silver has been rather weak lately:

  • The gold/silver ratio exceeds 67 today, a level not seen in the last 12 months, although still in a long term range.
  • Silver stands at the lower level of its 12 month trading range, while gold stands almost 10% above its 12 month bottom.
  • Silver sentiment, as measured by Sentimentrader, stands at 40 (on a scale to 100). In general, 50 is considered an important level which should hold when prices test their bottom.
  • The latest Public Opinion data showed a continued deterioration in silver. It still isn’t quite to its previous pessimistic extremes though.

It is mandatory that silver hold $18.50, otherwise chances are high that it will go lower short and mid term.

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