While it seems unlikely that the Fed will raise interest rates this month, any speculation regarding increased likelihood of rate hike later this year could pressure silver and other commodities in the near-term. That might explain why along with silver ETFs, gold ETFs tumbled in August.
Following a rally of this size, and at this stage of the trend, the price is likely to retrace approximately 50% of the 2016 advance. Based on that, SLV is expected to drop to between $16.38 and $15.71 in September. While a 2.5% drop in September is typical, it will take an 8% drop for the price to reach the typical retracement area ($16.38 to $15.71),” adds Investopedia.
Traders looking to profit from silvers downside can consider the ProShares UltraShort Silver ETF (NYSEArca: ZSL), which is a double-leveraged product.
For more information on the silver market, visit our silver category.
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