$SLVON
Silver Crashes 9% After Touching $89
Silver just experienced one of its sharpest single-day drops in months. COMEX futures collapsed over 10%. Shanghai traders got hit with a 4.64% overnight decline. The metal that broke out of a descending triangle toward $89 is now fighting to hold $79 .
🔹 The Damage Report
Spot silver dropped 9.14% to $78.88 per ounce . Shanghai Gold Exchange silver T+D fell 4.64% to 18,882 yuan per kilogram during the evening session . COMEX silver futures suffered the hardest blow, tumbling 10.47% to $76.40 per ounce . Gold T+D on the Shanghai exchange also declined, falling 0.57% to 1,002.9 yuan per gram .
The plunge rippled across all precious metals. Spot platinum fell 4.14% to $1,977.91. Spot palladium declined 2.47% . Even copper got caught, with COMEX futures dropping 5% to $6.2810 per pound.
🔹 The Speculators Were Long
The CFTC Commitments of Traders report shows large speculators increased net long positions by 5,254 contracts to 16,195 for the week ending May 12 . Silver speculators were aggressively positioned for upside. They were right, briefly.
Silver broke out of a descending triangle pattern on May 7, pushed straight to $89, and tagged the 0.382 Fibonacci resistance for the first time since February . Then the floor vanished.
The four-hour RSI had already broken down from its ascending trendline. The MACD histogram turned red and started sloping lower, signaling fading buying pressure before the selloff accelerated .
🔹 What Triggered The Collapse
Three forces hit simultaneously.
A surging US Dollar: Strong economic data boosted the dollar, making bullion more expensive for overseas buyers. The dollar's strength was the primary wrecking ball .
Rate hike fears: Hot PPI and CPI data this week erased rate cut expectations. Traders are pricing in potential additional tightening rather than easing. Higher rates crush non-yielding metals .
Oil-driven inflation panic: Oil prices remain elevated due to Strait of Hormuz disruptions. This fuels fears of prolonged inflationary pressure, which paradoxically strengthens the dollar and weakens precious metals short-term .
India-listed silver ETFs took direct hits. Tata Silver ETF, Nippon India Silver ETF, and HDFC Silver ETF all declined between 6% and 7% during the session . Hindustan Zinc shares fell nearly 5% .
🔹 The Key Levels Now
Support sits at the 50 EMA near $78.21. A breakdown below this level opens the 100 EMA at $74.47 and potentially the 200 EMA at $61.49 on the daily chart .
The technical picture shows silver trading inside an ascending parallel channel since early May. It now hovers near the lower boundary. A breakdown from this channel would likely target the 0.5 Fibonacci retracement near $79, which aligns with the daily support scenario .
The bullish invalidation sits at $83. A break below that level exposes the $70 to $65 zone. Resistance at $89 remains the ceiling. A clean break above $89 would reopen the path toward $101 .
Analyst Alexander Potavin noted that silver reacts more strongly to economic downturns and recessions than gold. The current macro mix of rising rates and sticky inflation is particularly toxic for silver's near-term outlook .
Bottom Line
Speculators added over 5,000 net longs before the crash. Silver hit $89 and reversed violently. COMEX futures shed 10.47%. Shanghai silver lost 4.64% overnight. The dollar surged on hot inflation data, rate cut expectations evaporated, and silver got crushed as the most sentiment-sensitive metal. Support at $79 to $78 must hold, or the $74 to $70 zone comes into play. The $83 level is the bullish invalidation. The $89 ceiling stands firm.
Friends, do you see this silver crash as a buying opportunity or a warning that the macro environment is turning decisively hostile for precious metals?
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