Silver - oh dear!
Silver - oh dear!
Further to yesterdays post about silver getting precariously close to breaking to the downside it seems that today's positive jobs report has had the undesired effect of smashing silver below the support line, for now at least. This is bad news in the short term and might result in further downward movement in the coming weeks, notwithstanding a bounce back later on this afternoon.
The weakness in silver has been evident over the past few months but the medium term up trend line has maintained support. I'm not happy about this move today, but fingers crossed the fundamentals will make sure this is a short term down trend and we will bounce back later in 2018. One big technical positive is that the gold/silver ratio remains stubbornly high reaching 80.6/1 which is usually an indicator of a major bottom.
As is often the case, these big moves often reverse so keep an eye on the price throughout the rest of the day. if we manage to bounce above 16.30 then the price might still be supported. Otherwise, buckle up, because the next few weeks could be a bumpy ride!
For disclosure, I'm not a professional advisor and this is not investment advice, merely my own observations of the market and indexes, so do your own research.
UPDATE
Did we dodge a silver bullet?
OK so I've drawn the support line to the lower of the intra day low back in July 2017 but I've ignored the intra day low today and connected the trend line to the close price instead, but I have to say, the resilience of silver is compelling. It dropped some way below the trend line before closing pretty much bang on it. That has to be a big positive for the metals prices going forward. Hooorah! Next weeks trading will be interesting (again) and I'm loath to say that I think this weekend will bring some fundamental news that will push the price one way or the other, because right now it's teetering on the edge. It's close but still on the support line.
Possible that a potential decline in gold prices this year could help the ratio but not silver spot price itself? Saw @haejin’s bearish post on gold, albeit its technical only and he’s not a gold expert.
It's unusual, but not impossible for a fall in gold to result in a fall in the ratio. What usually occurs is that gold rises but silver rises faster. Given that the ratio is pushing 80+ I think it's setting up for a big rally in both metals. That's certainly a historical precedent over the last few decades. I'll post something tomorrow on the ratio.
Looking forward to the post tomorrow
I thought it would hold the lower end of the downward sloping flag pattern, but today, it looks like further downside. Back up the truck, as I say
It's right on the edge, just below the support line so it could hold on in there. Keep your fingers crossed for it to gain about 5c before market close. If it does that's a really strong signal that support is holding.
I guess we have about an hour remaining, but looks like the spot is down to $16.27, so I'm not optimistic it will stay above $16.30. I'm in it for the long haul, anway, so if it doesn't rise it won't bother me too much...but I do enjoy the rare occurrence of seeing higher prices every once in awhile.
I guess we have about an hour remaining, but looks like the spot is down to $16.27, so I'm not optimistic it will stay above $16.30. I'm in it for the long haul, anway, so if it doesn't rise it won't bother me too much...but I do enjoy the rare occurrence of seeing higher prices every once in awhile.
The lower it goes, the more I scoop up. I've been stacking for a long time. I bought when it was $4.00 and I bought when it was $50.00.
That's a pretty good spread. I did notice in the UK that physical silver prices are carrying significant premiums over spot, so maybe that's a sign that there is not a great deal of supply.
Well, if it keeps dropping, I'll just have to force myself to go get some more. Shucks!!
See my comment to rollingthunder above.
I do agree that it might go down in the short term, but long term I am bullish as that silver/gold ratio peak has always shot both the metals higher. Plus, things are looking shaky in the stock market - again short term I am sure it will go up, but the next big up will most likely be the last one before the big correction happens.
It's a tough call this time around but I'm pretty much in agreement with you.