"We feel silver weakness has been a liquidation trade as investors grow increasingly wary of precious metals and traders are forced to close positions to meet margin calls elsewhere," said Stan Shamu, strategist at trading firm IG Markets.
Silver slumped over 4 percent on Monday to $21.30 an ounce, leading gold down lower by 1 percent to $1,344 an ounce. At one point silver hit a low of $20.30, down 8.8 percent from the start of trade on Monday.
Shamu is not ruling out further downside for the precious metal, noting that he sees support at $20, a key psychological barrier for investors.
Warren Gilman, chairman & CEO of investment firm CEF Holdings, agrees that silver could face further downside pressure, even below $20.
"When we have short-term volatile trends, silver acts like gold, only it's more volatile, so it's not a surprise to see it come off," he said.
According to a Citi report, if silver makes a rebound back towards the $27-28 level it will present renewed selling opportunities. Read more >>