The big silver price news that’s dragged the metal lower over the last month is the dollar’s rebound. After hitting a 32-month low of 91.35 on Sept. 8, the U. S. Dollar Index (DXY) – an index measuring the dollar against currencies like the yen and euro – has since recovered 2.4% to 93.54.
Since silver is priced in the dollar, any rally in the currency lowers demand from users of different currencies, which is bearish for silver prices. This is what pulled silver prices down 1.8% last week (Friday, Sept. 22, to Friday, Sept. 29) and 5.1% lower in September.
Investors saw a brief relief last Monday, Sept. 25, when the price of silverbumped back above $17. However, this was short-lived as silver quickly retreated below that level, where it has remained since.
I predicted we’d continue to see short-term weakness in silver, based on my expectation that the dollar had not finished its dead cat bounce. That’s when a long-declining asset – like the dollar, which is down 9.2% this year – briefly rebounds before falling again.
This post was published at Wall Street Examiner by Peter Krauth ‘ October 3, 2017.
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