Menu Close

This Technical Development Could Drive the Price of Silver Higher from Here

This is a syndicated repost published with the permission of Money Morning. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

The price of silver started consolidating in late January and continued through the past week.

We knew to expect this, as I had pointed out the metal’s fantastic rise from early November was due for a breather.

While silver prices dropped a little lower late last week to the $15.55 level, they quickly reversed and have already come close to the recent $16 ceiling.

And all of this has happened while the U.S. dollar index tacked on as much as 150 basis points.

Despite recent dollar strength, a dovish tone from the Fed may have capped rate hikes this year. That may limit the dollar’s rally and boost the silver price as we move further into 2019.

Although the gold/silver ratio is stagnating, silver equities are soaring, and they’re rallying at a faster pace than silver prices. This is a great sign for silver stocks and silver itself.

What’s more, we’ve recently gotten a very bullish technical development in silver prices that also points to higher silver before long.

Here’s what I’m watching…

How the Price of Silver Is Trending Now

Silver started out last week on a more neutral note, hovering around the $15.70 level, while the DXY managed to climb again toward 97.

Powerful Investment Income Stream: The Treasury is sitting on an $11.1 billion money pool. By adding your name to a special distribution list, you could begin collecting $1,795 or more every month. Get the details

By midweek, the dollar index was trading back above 97. That did manage to dent silver prices, which dropped to an intraday low early on Thursday. At $15.53, silver wasn’t getting much Valentine’s loving. But a mild turnaround in silver pulled it back up to close at $15.62.

Here’s a look at the DXY for the past five trading days…

price of silver

The dollar took another run higher on Friday, peaking at 97.29 near 8:30 a.m. But by 2 p.m., it was back below 97 at 96.86. That was silver’s cue to rally, which it did. The metal rallied quite strongly, heading into the long Presidents Day weekend at $15.79.

On Monday, silver consolidated a little higher at $15.81 as the DXY moved sideways near 96.77. But as investors and traders returned on Tuesday, gold powered higher to close at $1,340 while silver rallied to end near $16 at $15.96.

Now, here are the technical factors that could drive the price of silver even higher from here…

Here’s Where I Expect the Price of Silver to Head Now

The dollar index has had quite the run, from near 95 all the way above 97.

silver prices

It’s possible that the dollar could be in a period of strength, or at least consolidation. If it persists, I’d expect it to meander between 95 and 97.

It’s notable though that the DXY’s latest high has been below the highs reached in November and December. And looking at the relative strength index and moving average convergence divergence, it seems the dollar’s recent run-up may be losing steam.

But like I pointed out in last week’s update, even if the dollar remains strong, silver’s been performing well and could continue to do so.

As for silver itself, it certainly looks to be acting well, although its strength versus gold is lacking.

silver prices today

Silver now needs to close above $16 and hold that level, then take out its late January high around $16.11. On a positive note, silver has formed a bullish “golden cross,” whereby its 50-day moving average has crossed above its 200-day moving average.

But silver hasn’t kept pace with gold’s recent run to $1,340, evidenced by the gold/silver ratio that has risen again to 84.
price of silver per ounce

But we can glean some strength when looking at silver equities.

The Global X Silver Miners ETF (NYSE: SIL) is already up almost 25% since early November.

And if we look at the silver miners to silver ratio, we can see they’ve managed to advance at a faster pace than the metal.

silver prices 2019

That’s often a bullish sign. I’ll keep an eye on this indicator to see how it plays out.

Now let’s review my recent silver recommendations.

The SLV January 2021 calls with a strike price of $15 are off a slight 2.2% since recommended. Given their long term to expiration, they remain a buy on dips.

The 2x leveraged ProShares Ultra Silver ETF (NYSE: AGQ) is now up 4.6% and is a buy on dips.

Finally, the Global X Silver Miners ETF (NYSE: SIL) has gained 12% since I said to buy in mid-January. SIL is a buy on dips.

At this point, silver could continue to consolidate, or it may even run higher first. Either way, it needs to close above $16 and make that its new floor. My next targets will be $16.25, then $16.50 once the silver rally is clearly back on track.


To get full access to all Money Morning content, click here

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and visitors become smarter, more confident investors.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.

The post This Technical Development Could Drive the Price of Silver Higher from Here appeared first on Money Morning – We Make Investing Profitable.

Join the conversation and have a little fun at If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Follow by Email

Discover more from The Wall Street Examiner

Subscribe now to keep reading and get access to the full archive.

Continue reading