The price of silver was down 4.5% today. The worrisome fact for silver bulls is the extremely high volume associated with the price decline. The chart below shows the nasty sell off with the very high volume in the blue rectangle.
The key question is whether this is exhaustion selling, or the start of capitulation.
Capitulation is still in the cards. It could end the 4-year bear market in precious metals.
Alternatively, exhaustion selling is a plausible option because silver has reached the last key retracement levels of the monstrous rally which started in 2004. The next chart shows the critical price level at which silver has arrived.
Given the seasonally strongest period of the year for precious metals, it is not a healthy sign that silver is performing badly. We do not exclude capitulation, because basically there is no support on the long term chart until the $12.50 and $10.00 area.