Silver Weekly Price Forecast – Silver Markets Reach Towards Highs

Silver markets initially pulled back during the week to show signs of weakness, but then rallied rather significantly to break above the $18 level on Friday. By doing so, this is a very bullish sign and it is likely that we will see a lot of resistance near the $19 level. In fact, we have seen the $19 level offer selling pressure than once, so to simply blow through there would be exceedingly difficult to happen. I believe that a pullback is a bit overdue, although one would have a hard time arguing with the bullishness of at least the precious metals part of silver.

SILVER Video 01.06.20

I do believe that the $17 level should be rather supportive, and most certainly the $16 level as well. The biggest problem with move as of late is that silver depends on a lot of industrial man, something that does not seem to be highly likely at this point. Ultimately, this is a market that I think we are going to see a lot of volatility in, and clearly buying all the way up here is a bit difficult to do as it is stretched. That being said, the market will be difficult to short, so I think more than anything else you probably have an opportunity to buy silver at cheaper levels, and that is something that longer-term investors will be looking at with great interest. Do not use a lot of leverage in this market, that would be a great way to lose money at this point.

For a look at all of today’s economic events, check out our economic calendar.

Metals Nearing Critical Momentum for New Parabolic Rally

While the US stock market has rallied over the past 5+ weeks, Gold has stalled near $1730 to $1740.  We issued a research post suggesting the GREEN Fibonacci Price Amplitude Arc was acting as major resistance and once that level is breached, we expect a big upside move in Gold.  Currently, Gold has reached just above the Green Price Amplitude Arc and this week may be a critical moment for both Gold and Silver in terms of a momentum base.

GOLD FUTURES WEEKLY CHART

Gold has continued to move high in a series of waves – moving higher, then stalling/basing, then attempting another move higher.  This recent base near $1740, after the deeper price rotation in February/March, confirms our 2018/2019 predictive modeling research suggesting that $1750 would be a key level in the near future.  Part of that research suggested once $1750 is breached, then a bigger upside move would take place targeting levels above $2400 – eventually targeting $3750.

April 25, 2020: Fibonacci Price Amplitude Arcs Predict Big Gold Breakout

This consolidation after the COVID-19 event near $1750 is a very real confirmation for our researchers that the upside breakout move is about to happen.  How soon?  It could begin to break out next week of the following week?  How high could it go?  Our upside target is $2000 to $2100 initially – but Gold could rally to levels near $2400 on this next breakout move.

SILVER FUTURES WEEKLY CHART

While Gold has been consolidating near $1740, Silver has exhibited an incredible upside price move after a very clear Flag/Pennant formation (highlighted in YELLOW on the chart below).  The current upside price rally in Silver appears as though it may breach the MAGENTA downward sloping trend-line and this breakout move may prompt a rally to levels near or above $21 over the next few weeks.

Eric Sprott is very excited about silver and miners. Also, he talks about the demand for physical delivery which is way out of whack and how something could finally give which would be metals go parabolic.

We’ve been suggesting that metals will transition into a moderate parabolic upside price trend as the global markets deal with concerns related to economic activity, debt, solvency, and continued operational issues.  For skilled technical traders, this setup in Metals may be a very good opportunity for skilled technical traders to establish hedging positions in ETFs or physical metals before the breakout really solidifies.

Concluding Thoughts:

Longer-term, we believe metals could continue to rally for quite a while, yet we understand skilled technical traders want to time entries to limit risks.  We believe skilled technical traders should consider hedging their portfolio with a moderate position in Metals/Miners at this time – allowing traders to trade the remaining portion of their portfolio in other sectors/stocks.

If the US/Global markets continue to struggle to move higher over the next 60 to 90+ days, metals/miners should continue to push higher – possibly entering a new parabolic upside price move.  The deep washout low in Silver was an incredible opportunity for skilled traders to jump into Silver miners and Silver ETFs at extremely low price levels.  Now, with Silver at $18.40, it’s time to start thinking about $21+ Silver and $2100+ Gold.

Please take a moment to visit www.TheTechnicalTraders.com/tti to learn more about our passive long term investing signals, Also, get our swing trading signals here www.TheTechnicalTraders.com/ttt.  I can’t say it any better than this…  I want to help you create success while helping you protect and preserve your wealth – it’s that simple.

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Chief Market Strategist
Founder of Technical Trader Ltd.

 

Silver Price Forecast – Silver Markets Break Major Handle

Silver markets have broken above the $18 level during early trading on Friday, which of course is a very bullish sign. At this point I think that the silver markets are going to go looking towards the $19 level beyond that, which is also a major resistance barrier. At this point, we are likely to continue seeing quite a bit of noise in this market, as silver is volatile under the best of circumstances. If we can break above the $19 level, then it opens up a move to the $20 level. The silver markets do tend to move in one dollar increments, so this makes perfect sense.

SILVER Video 01.06.20

At this point, the $18 level should step in and start to offer support on pullbacks, and most certainly the $17 level will. Keep in mind that silver is an industrial metal, so although it is bullish it also has that working against it. Gold is still the purest play when it comes to fear and is most certainly outperforming silver. Regardless, you cannot sell this market, and if you are looking at the industrial demand as something that will be picking up, then silver makes quite a bit of sense.

It is bullish regardless, and if we can break above the $19 level, we should see a significant surge higher. Obviously, the $20 level is extraordinarily important from a psychological standpoint, so that will probably come into play as well. With this, the market is likely to see a lot of volatility, but I look at pullbacks as an opportunity to pick up silver with value.

For a look at all of today’s economic events, check out our economic calendar.

Daily Gold News: Friday, May 29 – Gold at Yesterday’s High

The gold futures contract gained 0.09% on Thursday, as it extended its consolidation following bouncing off $1,700 support level on Wednesday. Gold has been trading within a downward correction after reaching new monthly high of $1,775.80 on Monday almost two weeks ago. Wednesday’s price action was quite bullish, but gold keeps extending over month-long consolidation, as we can see on the daily chart:

Gold is 0.6% higher today, as it gets back to yesterday’s high. Financial markets remain in risk-on mode, as stocks hover along their new medium-term highs. What about the other precious metals?: Silver gained 1.18% on Thursday and today it is 2.6% higher, platinum lost 1.14% and today is trading 0.4% higher. Palladium lost 1.61% yesterday and today it is 1.6% lower again.

The recent economic data releases have been confirming negative coronavirus impact on global economies. Today’s Personal Spending number release came out worse than expected. However, the Personal Income data was better than expected. The market will await today’s Fed Chair Powell speech at 11:00 a.m. We will also have a speech from President Trump today. Investors are now waiting for the Chicago PMI release at 9:45 a.m. There will also be Michigan Sentiment number release at 10:00 a.m.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for today:

Friday, May 29

  • 5:00 a.m. Eurozone – CPI Flash Estimate y/y, Core CPI Flash Estimate y/y
  • 8:30 a.m. Canada – GDP m/m, RMPI m/m, IPPI m/m
  • 8:30 a.m. U.S. – Personal Spending m/m, Personal Income m/m, Core PCE Price Index m/m, Goods Trade Balance, Preliminary Wholesale Inventories m/m
  • 9:45 a.m. U.S. – Chicago PMI
  • 10:00 a.m. U.S. – Revised UoM Consumer Sentiment, Revised UoM Inflation Expectations
  • 11:00 a.m. U.S. – Fed Chair Powell Speech

Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!

For a look at all of today’s economic events, check out our economic calendar.

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Silver Price Daily Forecast – Silver Gets To New Highs

Silver Video 29.05.20.

Silver Continues Its Upside Move

Silver managed to get above the resistance at $17.50 and gained upside momentum. The move is supported by gold price upside and weaker U.S. dollar.

Gold has managed to settle above $1700 per ounce as the increase in U.S. – China tensions drives demand for safe haven assets.

Gold/silver ratio has firmly settled below 100 and continues to decline. Before the coronavirus crisis, gold/silver ratio was below 90, so a possible return to pre-crisis levels could be very beneficial for silver.

The U.S. dollar continues to lose ground against a broad basket of currencies despite its safe haven status, and the U.S. Dollar Index has already tested the 98 level. Weaker U.S. dollar is bullish for silver as it makes it cheaper for buyers who have other currencies.

In the near term, silver’s price action will heavily depend on the global market reaction to the upcoming news conference of the U.S. President Donald Trump where he is set to unveil new measures against China.

If the markets will be in a bearish mood following the news conference, the precious metal segment may gain additional upside momentum as investors will increase purchases of safe haven assets.

Technical Analysis

silver may 29 2020

Silver managed to get above $17.50 and has good chances to develop significant upside momentum. The recent peak in RSI is yet to be reached, so silver should not have problems with momentum given the right catalysts.

If this upside move continues, the next resistance is located at $18.15. In case silver manages to settle above $18.15, it will gain additional upside momentum and head towards resistance at $19.00.

This level will likely serve as a material obstacle on silver’s way up since it’s the pre-crisis high of 2020. In fact, silver has tried to test the $19.00 level two times this year, and each such attempt failed. The last time silver traded above $19.00 was back in September 2019.

On the support side, silver will continue to get significant support near $17.00. The support at this level was so strong that a move below it may signal a change of a near-term trend for silver.

In case silver gets below $17.00, the next support area is located between pre-crisis levels at $16.50 and the 20 EMA at $16.60.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Forecast – Silver Markets Continue to Pound Into Resistance

Silver markets are going back and forth overall between the $18 level on the top and the $17 level on the bottom. With that being said, it is worth paying attention to due to the fact that silver has a lot of meaning when it comes to the overall economy. After all, silver is a major industrial metal, and therefore if there is an explosion in the industrial sector, then by all means it looks like the demand for silver will continue to be strengthening.

SILVER Video 29.05.20

However, there is also the precious metals trade, due to the fact that central banks around the world continue to print money as fast as they can. Here that sound in the background? That is the sound of the printing press is going full tilt, and that of course helps the idea of metals. However, silver plays a second fiddle to gold, and therefore you need to look at that as reality.

To the downside, if we break the $17 level it is likely that the 200 day EMA and the 50 day EMA both will come into play and offer support. I think that silver needs to pullback drastically, and as a result we should see some more position building to the upside. However, if we do break above the $18.25 level then it is likely that we go looking towards the $19 level above. If we managed to break above there, then the market is likely to go towards the $20 level after that. Expect volatility regardless.

For a look at all of today’s economic events, check out our economic calendar.

Daily Gold News: Thursday, May 28 – Gold Higher Again

The gold futures contract gained 1.24% on Wednesday, as the market retraced most of its Tuesday’s decline. It bounced off a $1,700 support level again. Gold has been trading within a downward correction after reaching new monthly high of $1,775.80 on Monday a week ago. But yesterday’s price action was quite bullish and today it goes higher. But gold extends an over month-long consolidation, as we can see on the daily chart:

Gold is 0.7% higher today, as it is extending a short-term uptrend. Financial markets remain in risk-on mode, as stocks reach new medium-term highs. What about the other precious metals?: Silver gained 0.92% on Wednesday and today it is 0.4% higher, platinum gained 0.55% and today is trading 0.5% lower. Palladium lost 0.54% yesterday and today it is 0.6% lower again.

The recent economic data releases have been confirming negative coronavirus impact on global economies. Today’s U.S. GDP number release came out at -5.0% and Durable Goods Orders fell by 17.2%. The Unemployment Claims remained steady at over 2 million. We will also await the Pending Home Sales number release at 10:00 a.m.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days. Tomorrow we will get another series of the U.S. economic data releases and a speech from the Fed Chair Powell at 11:00 a.m.:

Thursday, May 28

  • 8:30 a.m. U.S. – Preliminary GDP q/q, Unemployment Claims , Durable Goods Orders m/m, Core Durable Goods Orders m/m, Preliminary GDP Price Index q/q
  • 10:00 a.m. U.S. – Pending Home Sales m/m
  • 11:00 a.m. U.S. – FOMC Member Williams Speech

Friday, May 29

  • 5:00 a.m. Eurozone – CPI Flash Estimate y/y, Core CPI Flash Estimate y/y
  • 8:30 a.m. Canada – GDP m/m, RMPI m/m, IPPI m/m
  • 8:30 a.m. U.S. – Personal Spending m/m, Personal Income m/m, Core PCE Price Index m/m, Goods Trade Balance, Preliminary Wholesale Inventories m/m
  • 9:45 a.m. U.S. – Chicago PMI
  • 10:00 a.m. U.S. – Revised UoM Consumer Sentiment, Revised UoM Inflation Expectations
  • 11:00 a.m. U.S. – Fed Chair Powell Speech

Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!

For a look at all of today’s economic events, check out our economic calendar.

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Silver Price Daily Forecast – Silver Gets Back Above Support At $17.00

Silver Video 28.05.20.

Silver Looks Ready To Test The Nearest Resistance

Yesterday, silver tried to settle below $17.00 but this attempt was unsuccessful, and silver returned back above this support level.

Gold managed to recover after the sell-off and is trading above the key $1700 level. Gold price upside is very important for the whole precious metal segment as it attracts new investments into the sector.

The U.S. Dollar Index is trying to settle below the support level at 99 following the release of various economic reports. In general, the economic picture remains grim, but the better-than-expected U.S. Continuing Jobless Claims report provides hopes that active hiring has already started in some sectors of the economy.

Gold/silver ratio is trying to get below 100 and looks set to continue the recent downside trend. Before the coronavirus crisis, gold/silver ratio was below 90, and a return to such levels will lead to material silver price upside.

So far, silver has shown that it has material support at current levels. The gold price upside and the general market upside help silver as it depends both on industrial demand and investment demand.

Technical Analysis

silver may 28 2020

Silver has significant support just below $17.00. It has already made four attempts to settle below this level, but each attempt was unsuccessful, and silver quickly returned back above $17.00.

RSI has left the overbought territory, suggesting that upside momentum can increase further. If this happens, silver will soon test the nearest resistance level at $17.50.

In case silver manages to get above the resistance at $17.50, it will gain additional upside momentum and head towards the next resistance level at $18.15. In this scenario, silver will break out of consolidation, so the upside move may be quick.

On the support side, the nearest support level for silver is located near $17.00. If silver manages to settle below this level, it will likely gain significant downside momentum and quickly head towards the test of the next support at $16.50.

This is the support at pre-crisis levels. In addition, the 20 EMA has finally increased to $16.50, so I’d expect a lot of interest close to this support level.

For a look at all of today’s economic events, check out our economic calendar.

 

All Eyes on the HUI Breakout Invalidation!

The key technical development of this week in the precious metals market is HUI’s invalidation of the breakout above the 2016 highs. It will be particularly interesting to see where it closes the week, as an invalidation in weekly closing terms will be a crystal-clear bearish confirmation.

Gold miners reversed before the end of yesterday’s session, but they didn’t manage to take HUI back above the highest weekly close of 2016 – the 278.61 level. The HUI closed at 271.06.

On the daily chart, we see that a short-term breakdown is currently being confirmed.

The GDX ETF moved below the rising support line based on the previous April and May lows and it closed there for two consecutive trading days. If the GDX closes below the rising dashed line once again today, the breakdown will be confirmed.

And based on gold’s 4-hour gold chart, it could be the case that the very short-term upswing that started yesterday, is already over.

Gold approached its short-term declining resistance line, and it’s currently testing it. This line already held less than a week ago, so it favors lower prices at this time.

Of course, by the time you read this analysis, gold might already be after a breakout. In this case, we wouldn’t be surprised to see gold futures at about $1,740 or even $1,760 before the next decline takes place. Again, that is IF the breakout takes place, but the entire point of creating resistance lines for gold is to detect gold’s tops – places that are likely NOT to be broken. Or that are going to be broken, but then an invalidation will follow, leading to further declines.

The GLD ETF bounced from the rising support line yesterday, and it then moved to the above-mentioned resistance line – that’s a relatively normal course of action. Based on HUI’s invalidation of the breakout above the 2016 high, it seems that the top is already in for gold and gold stocks, and the price action yesterday and today in gold doesn’t invalidate it.

And what can one forecast for silver?

The white metal is still showing strength on a very short-term basis, which further confirms the toppy nature of the most recent price moves. Silver tends to outperform at the very end of a given upswing, so we could even see more of that phenomenon – especially if the stock market moves even higher from here.

Silver is known (at least it should be known) for its fakeouts. Silver often breaks above certain resistance levels, only to invalidate these breakouts shortly thereafter. If silver’s “breakout” is not accompanied by an analogous move in gold or miners, the odds are that it’s a fakeout. The odds increase further if this action was preceded by a rally.

Therefore, if silver moves higher from here, and even breaks to new May highs, it might not be a bullish development at all. It could be a fakeout that only takes the white metal to about $18.50 or so – the declining resistance line based on the previous highs – and then starts the next huge downleg. Please keep in mind that silver already launched one huge slide from almost $19 this year, so another big move lower from these levels could definitely take place.

All in all, it seems that we’re going to see one more sizable move lower in the precious metals market before they move much higher, and the odds are that the downswing has already begun or it’s going to start shortly.

Thank you for reading today’s free analysis. Please note that it’s just a small fraction of today’s full Gold & Silver Trading Alert. The latter includes multiple details, but most importantly, it includes the clear discussion of what will be the sign telling one that gold’s move lower is almost certainly completely over. That’s the detail, we think you might enjoy, want, and need right now.

If you’d like to read those premium details, we have good news. As soon as you sign up for our free gold newsletter, you’ll get 7 access of no-obligation trial of our premium Gold & Silver Trading Alerts. It’s really free – sign up today.

For a look at all of today’s economic events, check out our economic calendar.

Przemyslaw Radomski, CFA

Editor-in-chief, Gold & Silver Fund Manager

Sunshine Profits: Analysis. Care. Profits.

* * * * *

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Gold-Silver Ratio And Correlation

From Investopedia:

Correlation is a statistic that measures the degree to which two variables move in relation to each other. Correlation measures association, but doesn’t show if x causes y or vice versa, or if the association is caused by a third–perhaps unseen–factor.”

For example, there is a possible correlation between localized, bad weather and crop failures. But how do you predict the timing and extent, or the effects, to a degree that can be profitable?

And there certainly is a correlation between the price of labor and materials vs. the finished cost of building a new home. But there is no correlation between the price of labor and materials vs. the number of new housing starts.

We can find patterns and rhythm that might appear to be correlation (or inverse correlation) by plotting the price differential of any two items but it still does not imply correlation.

So, are gold and silver correlated?

ARE GOLD AND SILVER CORRELATED?

Being literally specific according to the above (“correlation measures association…”) then, the question becomes “Is there association between gold and silver?”

The answer is yes, strictly speaking. But, only as it pertains to their use as money.

The association is blurred by the fact that silver’s primary role is industrial, and its role as money is secondary to its use in industry; whereas gold’s primary role is in its use as money, and its industrial use is secondary.

“The basic value of either gold or silver stems from its primary fundamental. This means that gold is valued for its role as real money and silver’s primary value stems from its use in industry. And the primary fundamental for each metal will always be the same, even though there can be changes in the relative relationship of primary and secondary uses.” (See Gold And Silver – Fundamentals Be Damned)

Below is a chart of gold prices for the past one hundred years. The prices are adjusted for the effects of inflation…

http://www.macrotrends.net/

As a result, we can see that gold’s value has increased considerably over the past one hundred years. Nearly all of that increase has come in the past fifty years.

Gold’s increase in price and value are inversely correlated to the decline in value of the US dollar over the same time frame.

This makes perfect sense because gold is real money and the original measure of value for all goods and services; whereas, the US dollar is a substitute for gold (i.e., real money).

There is an established association between gold and the US dollar. Gold’s higher price over time reflects the ongoing loss in value (purchasing power) of the US dollar. The more the US dollar loses value, the higher the price of gold will go.

Now let’s look at a similar chart for silver prices, also adjusted for inflation…

http://www.macrotrends.net/

Here we can see that silver has declined in value over the past one hundred years and is cheaper now than it was a century ago.

The inflation-adjusted price of silver and its real value has stayed below its price point of one hundred years ago for eighty-four out of the past one hundred years.

The two times which silver prices moved generally in tandem with gold came when gold was responding – and catching up – to ongoing and accumulated losses in purchasing power of the US dollar.

After briefly exhibiting extreme volatility on the upside, silver prices quickly dropped back to their historically evident trading range below $20 per ounce, inflation-adjusted.

Any association/correlation between silver and gold is limited in nature because each metal has a fundamental role which is considerably different from the other. Gold price history is indicative of its association and inverse correlation with the US dollar. Silver prices reflect the white metal’s primary use as an industrial commodity.

GOLD-SILVER RATIO FAVORS GOLD

Let’s look at one more chart. This one is the ratio of gold prices to silver prices, the gold-to-silver ratio…

In this chart we see more evidence of what we saw in both charts above. In both price and value terms, gold continues to increase relative to silver.

Referring to the same point of focus as in both charts above, the gold-to-silver ratio is nearly three times higher than it was one hundred years ago. It has continued to move higher, favoring gold, over the past fifty years.

As we said before, we can calculate a ratio of prices for any two different items; but, those ratios will not imply correlation UNLESS there is measurable association.

As far as gold and silver are concerned, any association is strictly limited. It is not that the ratio cannot move lower, in favor of silver. It can. And, it probably will at some point. But it will likely be very short-lived.

The ratio cannot and does not tell us when such a situation might occur. Ironically, after looking at these charts again, it might be more reasonable to entertain a prediction that IF  the ratio dropped to a significant degree in favor of silver, one might load up on gold and sell silver, with the expectation of quick resumption of the currently established clear trend of an ever higher ratio, favoring gold.

For a look at all of today’s economic events, check out our economic calendar.

(also see Gold-Silver Ratio: Debunking The Myth)

Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!

Silver Price Forecast – Silver Markets Continue Consolidation

Silver markets continue to see a lot of noise in both directions, as we had recently seen a massive move higher. At this point, it looks likely that the market continues to see a lot of back and forth, and I do not see that changing in the short term. Just above the $18 level it is likely that the gap that appeared in February will continue to be at the very least a psychological barrier. Yes, the gap has been filled but a lot of times these gaps continue to have at least somewhat of an effect in the future.

SILVER Video 28.05.20

If we can break above the little gap though, then it is likely that we could go to the $19 level above. At this point, the market is likely to see even more resistance, but raking through the $19 level clearly would open up the door to the $20 handle. On the downside, the $17 level is massive support that if we break down below it is likely that we will go looking towards the 200 day EMA which is closer to the $16.40 level, and then the $16 level after that as it was massive resistance previously.

That should be supportive now, so keep that in mind. All things being equal, this is a scenario where think buyers will come in on dips more than anything else, but I would wait for silver to get a bit “cheaper” in order to take advantage of what has been a very bullish run.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Silver Dives Back Under $17.00

Silver Video 27.05.20.

Gold Downside Puts Pressure On The Precious Metal Segment

Silver is losing ground today as gold declined below $1700 per ounce while the U.S. dollar remained flat against a broad basket of currencies.

The continuing optimism in the stock market put pressure on safe haven assets, and gold is trying to settle below the psychologically important $1700 level. A downside trend in gold will likely impact the whole precious metal segment so silver traders should closely watch the developments on the gold price front.

The U.S. Dollar Index tried to get below the key support level at 99, but this attempt was not successful. The U.S. Dollar Index remains in the range between 99 and 101, and a move out of this range will have a material impact on silver.

Weaker U.S. dollar is bullish for silver as it makes it less expensive for buyers who have other currencies, so a potential U.S. Dollar Index move towards 98 would serve as a bullish catalyst.

Gold/silver ratio failed to settle below the 100 level, putting additional pressure on silver. Before the coronavirus crisis created huge volatility in the precious metal segment, gold/silver ratio was below 90, so a potential return to pre-crisis levels is part of a bullish thesis for silver.

Technical Analysis

silver may 27 2020

Silver failed to settle above the key resistance level at $17.50 and is trying to get below the nearest support level at $17.00. This level has already been tested several times, and a temporary move below $17.00 does not necessarily mean that silver will gain additional downside momentum.

If it happens, silver will fall closer to the next support at pre-crisis levels at $16.50. In addition, the 20 EMA is not far from this support level, so the resulting support area should be rather strong.

In case silver gains more downside momentum, it will likely head towards the 50 EMA below $16.00.

On the upside, the resistance at $17.50 is the main obstacle on silver’s way up. RSI has left the overbought territory, and silver has good chances to gain additional upside momentum if right catalysts emerge. In this scenario, a move above $17.50 will lead to increased upside momentum and take silver closer to the next resistance level at $18.15.

For a look at all of today’s economic events, check out our economic calendar.

Daily Gold News: Wednesday, May 27 – Gold at $1,700 Again

The gold futures contract lost 1.72% on Tuesday, as it extended its downward correction from last week’s Monday’s new monthly high of $1,775.80. It has retraced almost all of the decline from April 14 high of $1,788.80 before reversing downwards again. Gold price continues to trade within an over month-long consolidation, as we can see on the daily chart (updated on Friday):

Gold is 0.7% lower today, as it trading close to $1,700 mark. Financial markets are in risk-on mode, as stocks extend their uptrend. What about the other precious metals?: Silver lost 0.55% on Tuesday and today it is 1.0% lower, platinum lost 1.47% and it trades 0.3% lower this morning. Palladium gained 0.6% yesterday and today it is 0.6% lower.

The recent economic data releases have been confirming a negative coronavirus impact on global economies. Yesterday’s CB Consumer Confidence has come out below 100 level once again and the New Home Sales remained close to 600k. The markets are used to bad economic numbers, as stocks trade relatively close to their medium-term local highs following rebounding from the late March lows.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days. Investors will await tomorrow’s U.S. GDP number release. And today we will get the Richmond Manufacturing Index and the Beige Book:

Wednesday, May 27

  • 3:30 a.m. Eurozone – ECB President Lagarde Speech
  • 10:00 a.m. U.S. – Richmond Manufacturing Index
  • 2:00 p.m. U.S. – Beige Book

Thursday, May 28

  • 8:30 a.m. U.S. – Preliminary GDP q/q, Unemployment Claims , Durable Goods Orders m/m, Core Durable Goods Orders m/m, Preliminary GDP Price Index q/q
  • 10:00 a.m. U.S. – Pending Home Sales m/m
  • 11:00 a.m. U.S. – FOMC Member Williams Speech

Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!

For a look at all of today’s economic events, check out our economic calendar.

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Silver Price Forecast – Silver Markets All Over the Place

Silver markets went back and forth during the trading session on Tuesday as traders try to figure out whether or not it is completely “risk on”, or if there is a lot of concern when it comes to the possible growth situation. Remember, silver is not only a precious metal, but it is also a major industrial metal. Ultimately, this is a market that I think continues to see a lot of volatility, and the $18 level continues to be a major resistance barrier. There is a slight gap just above there, so there is quite a bit of resistance. Do not be wrong, the gap has been filled previously but that does not mean that people will be paying attention to it.

SILVER Video 27.05.20

The $17 level underneath is significant support, so if we were to break down below that level it is highly likely that we could drip down towards the 200 day EMA. All things being equal though, this is a market that simply looks as if it has no idea where to go, and therefore I think we will continue to see a lot of back and forth in this general one dollar range. I do not like silver for the longer-term as much as I like gold though, as there seems to be a lot of potential negative headlines out there that could move the precious metal trade much higher. All things being equal though, I would not be a seller of silver regardless, because there is going to be a certain amount of demand built in.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Silver Gains Ground On Global Market Optimism

Silver Video 26.05.20.

Weaker U.S. Dollar Provides Additional Support To Silver

Global markets are in a rally mode today, and silver is no exception. Silver has settled above $17.00 and looks ready to test the next resistance level at $17.50.

The optimism is widespread so the U.S. dollar, which serves as a safe haven asset of last resort, is losing ground. The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has declined to the 99 level.

Weaker U.S. dollar is a bullish catalyst for precious metals as it makes them cheaper for buyers who have other currencies. The U.S. Dollar Index has been in the range between 99 and 101 for two months, and a downside move out of this range may provide additional support for silver.

Meanwhile, gold is mostly flat as its safe haven “component” is more significant than that of silver. For silver, industrial demand is very important, so the improvement of economic outlook provides material support for silver.

In another bullish development for silver, gold/silver ratio has dipped below 100 and looks ready to continue the current downside trend. Gold/silver ratio was below 90 ahead of the coronavirus crisis, and a return to pre-crisis levels will provide material upside for silver.

Technical Analysis

silver may 26 2020

Silver managed to settle above $17.00 and has good chances to test the nearest resistance level at $17.50. RSI stays elevated but is not extremely overbought, which means that silver has an opportunity to continue the previous upside move without a pullback.

In case silver gets above $17.50, it will likely gain additional upside momentum and head towards the next resistance level at $18.15.

On the support side, the nearest support for silver is located near $17.00. In recent trading sessions, silver made several attempts to settle below $17.00 but these attempts were met with increased buying activity.

If silver manages to get below $17.00, it will gain downside momentum and head towards the next support at pre-crisis levels at $16.50. In addition to support at $16.50, silver could also get support at the 20 EMA at $16.30, so it won’t be easy to get through this support area on the first attempt.

For a look at all of today’s economic events, check out our economic calendar.

Daily Gold News: Tuesday, May 26 – No Clear Short-Term Direction

The gold futures contract traded within a downward correction from its new monthly high of $1,775.80 last week. It has retraced almost all of the decline from April 14 high of $1,788.80 on Monday, before reversing downwards again. Gold price continues to trade within an over month-long consolidation, as we can see on the daily chart (updated on Friday):

Gold is 0.3% unchanged today, as it trading along the price of $1,730. What about the other precious metals?: Silver is 1.7% higher this morning, platinum is 0.4% lower, and palladium is down 0.8%. Precious metals are extending their short-term consolidation today.

Last week’s economic data releases didn’t bring much surprises. They have been confirming a negative coronavirus impact on global economies. Thursday’s Philly Fed Manufacturing Index came at over -43.1 points and the Unemployment Claims were over 2.4 million. Flash Manufacturing and Services PMI’s have been as expected, however still below the 50 mark. The markets are used to bad economic numbers, as stocks remain relatively close to their medium-term local highs following rebounding from the late March lows. On Friday, we didn’t get any important economic data. And yesterday there was a bank holiday in the U.S. – Memorial Day.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days. Investors will await today’s U.S. CB Consumer Confidence along with the New Home Sales data releases:

Tuesday, May 26

  • 9:00 a.m. U.S. – HPI m/m, S&P/CS Composite-20 HPI y/y
  • 9:00 a.m. Eurozone – ECB Financial Stability Review
  • 10:00 a.m. U.S. – CB Consumer Confidence, New Home Sales
  • 1:00 p.m. U.S. – FOMC Member Kashkari Speech
  • 5:00 p.m. Canada – BOC Governor Poloz Speech

Wednesday, May 27

  • 3:30 a.m. Eurozone – ECB President Lagarde Speech
  • 10:00 a.m. U.S. – Richmond Manufacturing Index
  • 2:00 p.m. U.S. – Beige Book

Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!

For a look at all of today’s economic events, check out our economic calendar.

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Silver Price Forecast – Silver Markets Slightly Softer On Holiday Session

Silver markets were a bit soft during the trading session on Monday, as a lot of traders will have been focus on the fact that it was a holiday session. With that in mind, I would not read too much into this candlestick, but looking at the $18.00 level above offers a lot of resistance, and it extends furthermore to the $19.00 level. There is a bit of a gap above the $18.00 level, although it has been filled previously. Nonetheless, that is an area that will attract a lot of attention furthermore.

SILVER Video 26.05.20

The large red candlestick from the Thursday session should give you a hint as to just how much resistance there is above. Ultimately, if we can break above the $18 level it will be difficult to break out. However, to the downside I think there are plenty of support levels underneath. The 200 day EMA underneath will attract a lot of attention near the $16.40 level, but before we get there at the $17 level should offer plenty of support. Furthermore, the $16.04 level is an area that was previous resistance, and as a result it is likely that the market will find some support in that area.

When you think of silver, you need to keep in mind that it is not only a precious metal, but it is also an industrial metal. Because of this, you need to pay attention to the fact that the market may focus on one direction over the other due to this. If you are trying to play the precious metal trade, by far gold is a much better way to do it.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Silver Stays Above $17.00

Silver Video 25.05.20.

Silver Searches For A New Support Level Near $17.00

Silver continues to stabilize following the pullback after the major upside move which took silver from $15.50 to $17.50 in a matter of few days.

Gold lacks upside momentum but stays firmly above the key $1700 level. Higher gold prices attract new money to the whole precious metal segment and are bullish for silver.

Gold/silver ratio stays above the 100 level but an attempt to get above 102 was met with increased resistance. Gold/silver ratio is elevated compared to pre-crisis levels so in case it continues the recent downside trend, silver will likely experience additional upside momentum.

The U.S. dollar is flat against a broad basket of currencies, and the U.S. Dollar Index has settled near the 100 level. Stronger U.S. dollar is bearish for silver since it makes silver more expensive for buyers who have other currencies, and the recent strength of the American currency put some pressure on silver.

The U.S. – China tensions continue to increase on a daily basis but it remains to be seen whether it will lead to additional strength in the precious metal segment. At this point, it’s hard to say that this is an important factor for silver price dynamics.

Technical Analysis

silver may 25 2020

Silver continues to get support in the area between $16.50 and $17.00. Initially, the pre-crisis level at $16.50 served as the first support level for silver following its rapid rise from $15.50 to $17.50, but it looks like a higher support level at $17.00 may be formed in case silver manages to stay above it for the upcoming trading sessions.

In case silver settles below $17.00, it will likely head towards the next support at $16.50. If the downside momentum is strong enough, the 20 EMA level at $16.20 may be tested as well.

On the upside, the nearest resistance for silver is located at $17.50. In case this level is breached to the upside, silver will likely gain additional upside momentum and head towards the next resistance level at $18.15.

I’d note that RSI has left the overbought territory, increasing chances for the next upside move in case silver gets support from positive catalysts. In another bullish development, the 20 EMA has recently breached the 50 EMA to the upside, suggesting that the upside momentum continues to increase.

For a look at all of today’s economic events, check out our economic calendar.

Daily Gold News: Monday, May 25 – Gold Trading Along Last Week’s Lows

The gold futures contract gained 0.79% on Friday as it slightly retraced Thursday decline of 1.7%. On Thursday it extended a downward correction from the last Monday’s new monthly high of $1,775.80. The market has retraced almost all of the decline from April 14 high of $1,788.80, before reversing downwards again. Gold price continues to trade within an over month-long consolidation, as we can see on the daily chart:

Gold is 0.3% lower today, as it extends a short-term consolidation following last Thursday’s decline. What about the other precious metals?: Silver gained 1.89% on Friday and today it is 0.5% lower. Platinum gained 2.29% and today it is 0.7% lower. And palladium lost 4.13%. Today it is 0.3% higher. Precious metals are within a short-term consolidation today.

Last week’s economic data releases didn’t bring much surprises. They have been confirming a negative coronavirus impact on gobal economies for some time. Thursday’s Philly Fed Manufacturing Index came at over -43.1 points and the Unemployment Claims were over 2.4 million. Flash Manufacturing and Services PMI’s have been as expected, however still below the 50 mark. The markets are used to bad economic numbers, as stocks remain relatively close to their medium-term local highs following rebounding from the late March lows. On Friday, we didn’t get any important economic data. And today, there’s a bank holiday in the U.S. – Memorial Day. So markets’ volatility is somewhat less than usual.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days. Investors will wait for tomorrow’s U.S. CB Consumer Confidence along with the New Home Sales data releases:

Monday, May 25

  • 1:30 p.m. Canada – BOC Governor Poloz Speech
  • All Day, U.S. – Bank Holiday (Memorial Day)

Tuesday, May 26

  • 9:00 a.m. U.S. – HPI m/m, S&P/CS Composite-20 HPI y/y
  • 9:00 a.m. Eurozone – ECB Financial Stability Review
  • 10:00 a.m. U.S. – CB Consumer Confidence, New Home Sales
  • 1:00 p.m. U.S. – FOMC Member Kashkari Speech
  • 5:00 p.m. Canada – BOC Governor Poloz Speech

Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!

For a look at all of today’s economic events, check out our economic calendar.

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Strong Buying of WTI: Subdued Gold Interest

Saxo Bank publishes two weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.

The below summary highlights futures positions and changes made by hedge funds across 24 major commodity futures up until last Tuesday, May 19. A week were the questionable Moderna vaccine promise and reduced lockdowns spurred continued demand for riskier assets. US stocks resumed their rally with the S&P 500 rising by 2.3% while bond yields traded softer and Dollar index lost 0.6%.

The Bloomberg Commodity Index jumped 2.7% to reach a one month high with all the major energy and metal futures posting strong gains. However, while the energy and metal sectors had a strong week the net-long across the 24 major commodity futures tracked in this was close to unchanged due continued selling of most agriculture commodities.

Energy

Another strong rally in crude oil saw the combine net long in WTI and Brent rise by 26k lots to 507k lots, a 16-week high. Seven consecutive weeks of buying has resulted in bullish WTI bets rising almost three-fold to 348k, a 20-month high, while Brent buyers have only added 102k lots to 158k. While not yet overly stretched, the amount of buying has left the market exposed should the technical and/or fundamental outlook turn less friendly. Buying interest in Brent has been much more muted.

Following a four-week rally WTI crude oil has temporarily been boxed in between resistance at $35.20/bbl, the April high and support at $30.75/bbl, the uptrend from the lows. How the market handle these two levels will give us a clue about the current strength of sentiment in the market.

Buyers returned to natural gas following the recent slump. The 6.4% price jump attracted 24k lots of fresh longs resulting in the net long rising to 136k lots.

Metals

Silver’s 14% surge helped drive a 54% increase in the net-long to 21k lots, the highest since March 17. Gold investors meanwhile continued to flock to bullion-backed ETFs while funds only added 12.3k lots to their futures net-long. Despite hitting a fresh multi-year high on escalating tensions between US and China, and the potential for further stimulus, the net-long at 173k lots remained close to an 11-month low.

Copper traders was the least bearish since January as the price popped higher to reach a two-month high on China housing data and virus hopes. The net-short was cut by 26% to 9.7k lots.

Agriculture

Broad selling of food commodities continued with just four out of 13 futures contracts being bought. All the three major crops were sold, not least corn which saw a 15% increase in the net-short to 245k lots, a one-year high. One of the few exceptions was sugar as the continued rally in crude oil potentially could divert sugar canes back toward ethanol production instead of the sweetener.

What is the Commitments of Traders report?

The Commitments of Traders (COT) report is issued by the US Commodity Futures Trading Commission (CFTC) every Friday at 15:30 EST with data from the week ending the previous Tuesday. The report breaks down the open interest across major futures markets from bonds, stock index, currencies and commodities. The ICE Futures Europe Exchange issues a similar report, also on Fridays, covering Brent crude oil and gas oil.

In commodities, the open interest is broken into the following categories: Producer/Merchant/Processor/User; Swap Dealers; Managed Money and other.

In financials the categories are Dealer/Intermediary; Asset Manager/Institutional; Managed Money and other.

Our focus is primarily on the behaviour of Managed Money traders such as commodity trading advisors (CTA), commodity pool operators (CPO), and unregistered funds.

They are likely to have tight stops and no underlying exposure that is being hedged. This makes them most reactive to changes in fundamental or technical price developments. It provides views about major trends but also helps to decipher when a reversal is looming.

Ole Hansen, Head of Commodity Strategy at Saxo Bank.

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This article is provided by Saxo Capital Markets (Australia) Pty. Ltd, part of Saxo Bank Group through RSS feeds on FX Empire