Silver Downside Momentum is Building

July 13, 2018 9:52AM CDT

September silver is trading 15.77, down 20 cents on the day. The dollar is materially strong once again, setting up on the charts what appears to be a setup for another leg up. The strength of the US dollar leaves metals very weak across the board.

The technical outlook for silver looks to extend silver down to low 15.30 range. A close above 16.50 is needed to turn momentum up. It is Friday the 13th and horror is upon silver as it takes out previous weeks’ low.

The US-China spat over trade is still ongoing. Aside from exchanging words, there hasn’t been any clear policy and sitting down on either side working out any meaningful resolution. In other words, things will get much worse before they get better. It’s human nature to drag this out as long as possible before the leader's sit down and iron out the differences.

The weekly chart below in silver shows more weakness likely. Surprising energy is very strong but it doesn’t seem to spill over to the other markets. As I have stated in previous writing, “Silver needs to trade above 16.50 to get the bulls excited. If the dollar recovers, low 15.00’s are likely.”  

Silver Sep '18 Weekly Chart

Silver Sep '18 Weekly Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.