Here are my notes for reasons why I am currently short silver:
1. China Growth Concern:
- Caused a drop across the commodity markets over the past month, of which a drop in silver has lagged behind the fall in the other major trading commodities.
- The drop and continued uncertainty in the Shanghai Composite Index is likely to continue to weigh down upon the Chinese economic outlook over the coming months.
2. Dollar Strength:
- Moves in the FOREX markets in combination with the poor Eurozone outlook and Asian quantitative easing program have created a dollar strong environment, which will help to pull all commodities downwards in price.
3. Gold Correlation:
- While silver does have more industrial uses than gold, it generally correlates with the gold price movement (as a fiat currency hedge - buying gold is going long market fear), which has been steeply downwards over the last couple of days. Silver needs to make a significant move downwards in order for this correlation to remain consistent.
Enjoy,
The Masked Stock Trader
No comments:
Post a Comment