Silver Experiences Major Decline
On January 15, silver and the iShares Silver ETF (SLV) dropped nearly 40% intraday, marking one of the largest declines for the metal in over a century. This significant plunge has raised concerns about whether silver has reached a multi-year peak, similar to historical blow-off tops observed in 1980 and 2011.
Key indicators prior to the drop included silver being over 100% above its 200-day moving average, the emergence of four exhaustion gaps in the SLV ETF, and record trading volumes across silver proxies, suggesting market exuberance. Additionally, silver touched a critical Fibonacci extension level before the decline.
The recent drop in silver prices is attributed to profit-taking, a rising U.S. dollar, and changes in Federal Reserve leadership, and it could have implications for equities, as historical data shows a correlation between silver peaks and subsequent market volatility.
