LONDON (Commodity Online): Silver was lower on Tuesday, now falling back after hitting the highest price in a year 2 weeks ago, although still below last year's high near $20. The indicators are beginning to turn down again after some minor improvement in the past week, says a silver technical indicators report from Kitco.

Silver is influenced by gold price which in turn is influenced by the US dollar. A rise in dollar is likely to help the precious metals. The US Dollar Index (DECEMBER contract) closed today (Monday) at .75.50. The U. S. Dollar Index is still well below the high of 92 hit in November 2005 and well below its all time record high in 2002 near 120.00).

The short term silver indicators are negative.

Precious metals prices have recently been influenced by Crude Oil but now the silver appears to react more to the recent large moves in the stock market which could lead to a slower economy and reduced demand for precious metals.

There are some similarities to the gold and silver market in 1979 and 1980 when silver soared to around $50 an ounce. One major exception however is that U.S. interest rates were rising then as inflation hit double digits - that is not the case now as interest rates have been declining, not rising.

The latest Commitment of Traders report (as of October 13) shows that long speculators in the silver market outnumber the shorts by 4 to one, the long speculators accounting for 63% of the market versus 14% short.

Before the silver started to rise in the past few years, the average open interest was usually between 70,000 and 80,000 (compared to near 136 thousand now - as of yesterday).