Silver Down 8 Days in a Row

Mixed US retail sales

In September, US retail sales disappointedly remained flat against expectations for a 0.2% month-on-month increase. Retail sales (nominal) increased by 8.2% year over year, the slowest rise since April.

Both Ex-Autos and Ex-Autos and Gas increased more than anticipated (by +0.1% vs -0.1% exp and +0.3% vs +0.2% exp, respectively). As a result, core retail sales increased 6.6% year over year, precisely in line with the 6.6% yearly increase in Core CPI.

Finally, the control group, which contributes directly to GDP, increased by 0.4% monthly (more than the predicted +0.3%).

According to data released today by the US Bureau of Labor Statistics, US import prices fell 1.2 percent in September after falling 1.1% the previous month. The decline in US import prices in September resulted from lower gasoline and nonfuel costs. In addition, after declining by 1.7% in August, export prices in the United States dropped by 0.8% in September.

Bears are entirely in control

The short-term uptrend line has been broken in the RSI indicator, implying the same scenario for the actual price of the metal. The current support now stands at 18.45 USD; if not held, silver could decline toward the cycle lows near 17.60 USD.

However, statistically speaking, the solid 8-day decline calls for a relief rally, which could happen any minute now. Therefore, the demand zone near 18.50 USD could start another short-squeeze, potentially sending the metal back toward the critical 20 USD threshold.

As long as silver remains heavily oversold, the easier way for the markets will be to drive the bears from the market by posting a solid relief rally before dropping to new trend lows.