In its latest announcement, the Federal Reserve attempted to prop up the stock market.

The Fed tried to sound hawkish, but the market paid no heed. The Fed annulment was reflected in a manner that led the way to the dollar tanking and precious metals rising.

Silver has industrial uses as well as monetary ones, which will come to the forefront as the gold bull market progresses.

"The Fed has had numerous opportunities to normalize rates over the past two years and [has] squandered them all," said Peter Hug, global trading director at Kitco Metals, in an emailed note after the Fed statement, MarketWatch reported.

Although a few analysts think that the Fed has kept hopes alive for a rate hike next month, the market doesn't think so. The federal funds futures points to the status quo at the next meeting, as 88% of traders think that the Fed won't act.

The judgment of Fed members notwithstanding, what choice do they have but to leave the possibility of a rate hike on the table? They would look like total buffoons if they reversed course now.

This sudden spike in the price of silver has definitely caught a lot of analysts off guard. The fact that the Fed is now less likely to raise rates after the Brexit and the dollar's decline are the primary reasons for silver's rise.

The dollar bulls, who were optimistic on the Fed, had pushed prices above the 97 levels. However, after the Fed's decision, prices tanked and rightly so.

Another reason for an increase in silver prices is the surge in demand due its industrial application.

"Silver has [more room to run] because silver is increasingly used in solar panels. Something like 10% of demand comes from solar panels," Jeremy Wrathall, mining team leader at Investec, told CNBC on July 4.

"Solar panels are a growing source of demand for silver, so you have got an additional attraction for silver as well, as a commodity investment and also industrial usage," he said.

The chart of the dollar index shows that for more than a month, it has remained in an up-trending channel. However, the dollar recently broke down the channel, signifying that traders don't buy the hawkishness.

The break of the channel has a target of close to 95.2, which also coincides with the 50% re-tracement of the total rise from the lows of 93. However, if the dollar continues to tumble, it has a small support at 94.7 levels, post which, it will retrace the complete move.

The fall in the dollar will reflect in the rise of silver. Silver looks like it is on the cusp of a rally.

The silver bulls have seen a stupendous run from the lows of about $13.73 at the start of the year to the highs of $21.2 early last month. However, the bull run in silver looks poised to continue after a small consolidation.

Silver is consolidating in a range of 19.3 on the lower side and 21.2 on the higher side. If silver manages to break above the range, its pattern target is 23.

However, it looks like silver will scale the level of 23 and reach the 26 level by the end of this year.

Historically, August has been a rough month for stock investors.

In the past 20 years, the market has been down an average 1.3% in August, according to Bespoke Market Intelligence.

"I would expect August to be mediocre or weak," said Don Townswick, director of equities at Conning.

Similarly, David Kostin, chief equity strategist at Goldman Sachs is bearish.

This price-earnings ratio expansion cycle has reached the third largest ever in history.

Consider that the rise in stocks has come on the back of poor earnings, dismal growth and huge financial risks on the horizon. A market crash is imminent, and it looks like this month and next month will sow the seeds for a larger decline.

The equity markets look poised to follow their negative record of August and September, and the decline, which will be moderate in the beginning, looks like it will end with a sharp slide.

As the global financial reset of the monetary system begins, there will be an increase in the demand for silver relative to the increase in the demand for gold. Gold is an establishment metal relative to silver.

No central bank are hoarders of silver. There is no one in the establishment who considers silver, as money, as of yet.

History will repeat itself this month, and we will see a sharp fall this month and next. The traders are accepting that the Fed won't raise rates anymore this year and they are placing their bets accordingly.

Our short call on the dollar was timed to perfection, and it looks like the short call we give on the stock market will also produce similar results. Get ready for more such profitable trades in the following months.

This article is commentary by an independent contributor. 

Chris Vermeulen is full-time trader and research analyst for TheGoldAndOilGuy Newsletter.