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Silver Market Flirting With The Bears

Commentaries & Views

Before I get into details, I want to be clear that I am a long-term believer in silver and over time a tsunami of bullish fundamentals will hit the silver market. I have always felt that supplies are limited, demand is increasing, a massive short seller will cover and technological as well as medical uses are on the rise.

Despite these bullish fundamentals one must pay attention to the short-term ripples that impact markets, while monitoring the technicals. Currently soft U.S. and European data coupled with escalating Brexit fears have led to a stronger dollar which have pumped the breaks on the recent rally. Something else to keep an eye on are ETF holdings. We have seen gold ETF holdings reach the highest level since July 2018 while silver ETF holdings have declined to the lowest level since April 2017. 

If you haven’t ordered a complimentary 2019 Hightower Commodity Trading Guide & Calendar, we will have some of these available to send out. *Available to U.S. residents only.

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Silver Price Chart

The charts Above are from provided by RJO Futures PRO, an exclusive and sophisticated online trading platform with integrated tools to seamlessly trade and monitor the markets. You can demo the platform here RJO PRO Demo

Analysis and Outlook

The daily March silver chart is flashing caution because of the sliding 200 DMA and the close proximity of the futures prices. We are seeing Stochastics correct from over bought territory and the MACD starting to roll over. The average true range is consolidating at 20 cents leaving silver to face a larger that anticipated correction when it comes. ADX which measures the strength of the trend has flattened out and that means the upward trend is weakening. If we see a close below the 200 DMA and the next session gapping lower, this could be your trigger that the correction is starting and washout to $15 could happen while a push back from here up to $16 and close above that resumes the upward trend completely nullifies my hypothesis.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.