Investors Should Pay Attention To Silver Momentum - Analysts
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said that continued financial market volatility and a weaker U.S. dollar should continue to support silver prices.
In a report Wednesday, McGlone described silver's weakness in the second half of last year as a “failed bear-market raid.” However, he added silver’s resilience in the face of extreme weakness could mark a long-term bottom for the precious metal as buying momentum picks up.
He added that the critical level investors should keep an eye is $16.35 an ounce, which represents a long-term resistance level. His comments come as March silver futures last traded at $15.785 an ounce, up 0.46% on the day.
“Silver is poised in 2019 to move above a resistance level that has held the market in check for three years, in our view,” he said. “A primary companion of higher silver prices -- a weakening dollar -- is likely to join the recovery in gold and industrial-metals prices.”
McGlone isn’t alone in his bullish outlook for silver. Ira Epstein, director of the Ira Epstein Division of Linn & Associates, Inc., also said that he is bullish on the metal in a note to clients.
Epstein said that he sees a potential for silver to move higher through the year as it looks like the Fed will scale back its monetary policy tightening.
“As I see it, silver is now in an uptrend. Long positions are now warranted and should be held to as long as prices don’t close back under the 18-day moving average,” he said.
Epstein said that he is looking for initial resistance at $15.955 but added that with its current momentum, it has room to run to $17 an ounce.