Long

Silver Consolidates - The Path Remains Higher

Silver sits at the $25 Level
An eleven-year low and seven-year high in 2020, A higher high in Q1 2021
Liquidity, stimulus, and US energy policy support silver
China's digital currency is another bullish factor
Expect the unexpected in the silver market

Silver can be the most volatile of the precious metals that trade on the COMEX and NYMEX divisions of the Chicago Mercantile Exchange. In 1980, the price rose to the all-time high of $50.36 per ounce. In 2011, the price fell short of that peak when it managed to reach $49.82.

Silver traded below $10 from 1985 through 2005 for two decades. Silver has not traded below ten bucks since 2008. 2020 was a wild year in the silver market as it traded in an $18.175 range and put in a bullish reversal trading pattern on the annual chart.

As the annual chart highlights, silver fell below the 2019 low and closed above the high from that year. Silver has remained above the $23.70 level so far in 2021 and was north of twenty-five bucks on Friday, April 9.

Silver is consolidating and digesting its most recent high in early February. The odds continue to favor higher silver prices over the coming months and years, but the road will be bumpy.

Silver sits at the $25 level
On Friday, April 9, nearby May COMEX silver futures settled at the $25.325 per ounce level.

The daily chart shows that since reaching the low for 2021 at $23.74 on March 31, silver has been edging higher. Open interest, the total number of open long and short positions in the silver futures market, has climbed from 151,403 contracts at the end of March to over the 160,000 level. Increasing open interest when a futures price rises tends to be a technical validation of an emerging bullish trend. While relative strength is neutral, the price momentum indicator is rising. Daily historical price volatility is sitting at the 24.70% level, closer to the low than the high in 2021. Silver is consolidating and waiting for the next move after a highly volatile year in 2020.

An eleven-year low and seven-year high in 2020- A higher high in Q1 2021
Last year, silver traded in over an $18 per ounce range from low to high.

As the monthly chart illustrates, the March price carnage in markets across all asset classes took the price to a low of $11.74, the lowest in eleven years since 2009. Five months later, in August, silver futures rallied to the highest price since 2013 at $29.915. In early February 2021, the price made a marginally higher high at $30.35 to keep the bullish trend intact. Critical technical resistance in the silver futures market stands at the July 2016 $21.095; the level silver broke higher above in July 2020. Above the 2021 peak, the next upside target is at the October 2012 $35.445 level, a gateway to the 2011 and 1980 highs.

Continue reading with the link below.

Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading.

Andy_Hecht

Also on:

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.