Make Kitco Your Homepage

Contributed Commentaries

Much ado about silver

Jonathan Da Silva

Kitco Commentaries | Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Commentaries & Views

Friday, I suggested metal bulls still have the power, and for gold, the evidence of that is yet another higher high made overnight. Yesterday morning gold produced a false breakdown (shown on the 2-hour chart below) of the rising uptrend line shown on Friday as well. But prices promptly recovered to resume their uptrend trend; this can be taken as a bullish sign.

Silver bulls, however, were subjected to an outsized and aggressive bout of selling yesterday morning, as the metal left all prior medium-term correlations in the dust, as if it were lifted and transposed out of the existing market to trade in a vacuum; experienced silver traders and investors have no doubt seen this movie before; which tends to roll as a Sunday evening special or Monday morning matinee, the most opportune moment. The below 4-hour chart of silver shows the price breaking down from the box shown on Friday; I thought $22.55 was in range on the breakdown, but sellers couldn’t get the price under $22.75 before the dip was bought (I have covered buying dips multiple times on this run).

I am seeing a lot of speculation about how this setup (breakdown and recovery) in silver is extremely bullish. And while I believe that metals bulls still have the power (as titled on Friday), I would like to see Ag close over $23.90 spot this week to confirm a complete reversal of yesterday morning’s indiscriminate selling - and another run at $24.50, this time.

Thanks and have a nice day,

By Jonathan Da Silva

Contributing to kitco.com

Contact jdasilva@kitco.com
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.