The timing seemed almost too perfect. On Wednesday, silver was nearing the elusive price of $40 per ounce, while gold futures were on the verge of another breakout attempt. However, the largest manipulator of the silver market intervened, preventing this from happening. Headlines emerged indicating that the United States was "close to reaching a deal" with the European Union. As a result, gold prices quickly dropped by $40 per ounce, and silver retreated from $39.91, ultimately closing the day at $39.50. Fast forward to Friday: silver is down $1.70 from Wednesday's highs and is now trading at our tactical support level of $38.21.
As the August 1st trade deadline approaches, countries such as Mexico, Canada, and the European Union are actively working to finalize essential trade agreements. These deals play a crucial role in shaping the economy by influencing trade flows and impacting economic growth. It's critical to consider the impact of tariffs on major silver-producing nations, such as Mexico and Canada, which are significant suppliers of U.S. silver imports. By reaching a trade agreement with these nations, stable supply chains are maintained and adequate silver is available in the market, which can temporarily slow down potential price increases arising from demand outpacing supply.
Daily Silver Chart
Once the details of the trade agreements are settled, the Federal Reserve may start lowering interest rates. This could lead to a further decline in the value of the U.S. Dollar, which has already dropped 11% this year. The Dollar could decrease even further, reaching levels similar to those during the last Trump presidency, when the Dollar index fell to 92, which would mean a 5% drop from its current level. We anticipate that to be the next catalyst to drive up hard assets and ultimately fuel a rally to $50 and Gold to $4,000 in the next 12 months. Staying ahead of the Silver market has never been easier. Get the Blue Line Futures Precious Metals Chart Pack today by registering here: Get Precious Metals Chart Pack
As for who was last Wednesday's Silver Manipulator? If President Trump had waited just 10 minutes, an hour, or even a day to act, the silver market might have just hit that $40 mark.
Phillip Streible
Phillip Streible is a Series 3 licensed Chief Market Strategist at Blue Line Futures and specializes in working with clients in developing futures and options strategies in the metals markets. As the Chief Market Strategist his goal is to show clients how to anticipate, recognize and react to bull and bear market conditions through the use of fundamental and technical analysis techniques that help them to define risk. With more than 16 years of experience working with clients, Phillip ran one of the largest retail commodities desks while at Lind-Waldock where he focused on metals, energies, currencies and agricultural markets.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.