Three reasons why silver prices are falling
There are three main reasons why silver price is falling. First, the dollar has been relatively strong in recent days. Indeed, the dollar index has been rising for the past 5 consecutive days and is in its highest level since July. A stronger dollar tends to be overall negative not only for silver but for other assets as well. That is because these assets are usually traded in dollars.
Second, silver price is falling because of the rising number of COVID-19 cases in several countries. Just two days ago, the UK confirmed fresh lockdowns, new cases are the highest figure in months. And the Chief Medical Officer (CMO) predicts that the number could rise to more than 200,000 by the end of November. The cases have risen in other countries like Italy and Spain. The implication is that this increase will lead to lower demand for the metal. That is because, unlike gold, silver is usually an industrial metal.
Third, the price of silver is falling because of psychological reasons. That is because in recent months, the price has soared to multi-year highs. This increase was partly because of retail traders who used it a proxy for the more expensive gold price. Therefore, once the price starts falling, it tends to lead to more selling pressure from this group of traders.
regards: The B wave Baki
Second, silver price is falling because of the rising number of COVID-19 cases in several countries. Just two days ago, the UK confirmed fresh lockdowns, new cases are the highest figure in months. And the Chief Medical Officer (CMO) predicts that the number could rise to more than 200,000 by the end of November. The cases have risen in other countries like Italy and Spain. The implication is that this increase will lead to lower demand for the metal. That is because, unlike gold, silver is usually an industrial metal.
Third, the price of silver is falling because of psychological reasons. That is because in recent months, the price has soared to multi-year highs. This increase was partly because of retail traders who used it a proxy for the more expensive gold price. Therefore, once the price starts falling, it tends to lead to more selling pressure from this group of traders.
regards: The B wave Baki
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