If you think gold’s implosion has been harsh, talk to someone who’s been long on silver for the past few months — they’ve fared much worse. In fact, they’ve fared 50% worse than gold’s bulls have if you start the clock back at the early October price peaks for both metals.

During that time, the commodities have performed similarly, but the SPDR Gold Shares (NYSE:GLD) has lost 12% of its value compared to 18% for the iShares Silver Trust (NYSE:SLV).

Some would argue that silver’s outsized loss makes it ripe for an equally outsized rebound. I think that’s a hope-driven opinion, however, and it might end up being a moot opinion when it’s all said and done.

See, just like gold, silver’s now officially in a heap of technical trouble and still needs to burn off some of its 2010/2011 rally that it never fully deserved.

Silver’s Still Melting

Just for the record, yes, I was the guy who said silver was a smarter long-term holding than gold last August. I also was the guy who last week said gold’s small stumble wasn’t nearly as “small” as it was being made out to be. Sure enough, gold fell more than 5% between then and now, and the selling effort is hardly over yet.

None of that was to say silver can’t lose significant chunks of value under the right circumstances, though. It can, and it has, and it will again. In fact, I suspect (like gold) that silver’s bottom has yet to be made.

Click to Enlarge The nearby chart tells the tale. Although silver had pulled back in the past, it wasn’t until this week that a key support line extending all the way back to late 2008 — the beginning of the mega-rally — was snapped. Now that the damage is done, though, it can’t be undone. The string of lower highs since early 2011 only augments the brewing bearish momentum.

The rising dollar isn’t helping matters.

With silver priced in U.S. dollars, each time the dollar gains in value, silver loses its (relative) value. The U.S. Dollar Index is at new multiweek highs right now, and appears to be ready to dole out more advances as the currency war starts to inch closer … even though all the combatants are pledging that there’s not going to be a currency war. The market knows better.

It’s not just a rising dollar that’s sapping silver, however. Silver demand is actually falling, or the supply is too great, or some combination thereof.

CME Group (NASDAQ:CME) — the organization that manages several commodity exchange floors — reported earlier this week that silver stockpiles are at the highest level they’ve been in 16 years. A total of 152 million ounces is waiting in safekeeping to be bought by … well, someone. Either the miners overproduced or the buyers are cutting back. Either way, supply-and-demand models being what they are, and with supplies near multidecade highs, silver prices are in no position for a quick recovery.

And Gold?

While silver is only in dire straits as of this week, gold has been there since last week with a move under a key support line … a support line not unlike silver’s. Gold has managed to dig itself deeper into a hole, though. Yet, it’s gold’s chart that will tell us first if there’s any prayer of a quick rebound here.

Click to Enlarge The 1,530 level — plotted with an orange line on the nearby chart — is a biggie for gold futures, prompting a bounce in late 2011 as well as mid-2012. Will the bulls pull off an upset again, or will the third time be the charm for the bears? We’ll see, though it might take a while to see that test made.

In the meantime, though, every day gold doesn’t make meaningful bullish progress makes it that much more difficult to do so later on — it gives time for resistance lines to develop, like the resistance that the 200-day and the 50-day moving average lines might be bringing to the table around $1,670.

It all begs the question, is silver in deeper trouble than gold from here? Or, as an optimist might ask, could silver decouple itself from gold here, and rebound even if gold doesn’t? Not likely. No, these two commodities are in the same boat together, for better and worse. Right now, it’s the “worse.”

And truth be told, that reality — the reality that gold and silver trade in tandem — might be a little unfair. Silver has significant and practical applications in electronics and medicine. Gold, on the other hand, is largely a speculating instrument not driven by demand nearly as much as it’s driven by hype and a herd-mentality.

As long as investors have mentally linked the two together, though, silver’s apt to follow gold’s lead … and that’s working against silver for the time being.

Not that the huge supply of silver was helping any.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.