In the past the cost of silver and the market price tended to stay fairly stable, but this is no longer the case. The amount of metal and the number of traders on the market have changed significantly over the years and this has changed the possible ceiling amount and level that many see for silver.
As new technology is developed silver is being used in more industries and technological applications, and this demand has increased the pressure on the market price. Silver has certain characteristics that make it the best choice in many industrial settings and applications and this greatly increases the demand for the limited supply of the level around the world.
The advancements in medical science have also increased the silver demand. Silver is used in a wide range of medical treatment and applications, and these detract from the amount of silver that is available to investors. A higher demand means a higher spot price and more potential buyers for the metal so there is more competition.
Few investors believe that the silver prices have reached the ceiling. In fact, most investors believe that this metal is greatly undervalued on the current market and believe that once the price suppression ends the cost of this metal will shoot up. There is no guarantee with any investment though, so each investor should evaluate the vehicle carefully before making any investment decisions or risking any hard-earned capital.
Silver prices are forming a pennant pattern (shown below in the chart) near its long term trendline inside a short-term uptrend channel. And the outlook proves difficult to determine since it would require the investor to choose between two different analyses.
After the horrible crash in May, silver has been trading in an uptrend channel. The case for a bearish possibility remains in its technical since prices are now near a long term trendline which propelled silver to near $30′s in May. Combined with the fact that the whole uptrend move since October can be viewed as a bearish flag. I would not be surprised if silver dropped down to $17-$19/oz and bottomed at those levels. I see $28-$30 silver by December 2022. Within several years as inflation gains ground, we should hit and exceed all-time highs in silver.
Let’s see a lot of people are even predicting lower ranges like $12-$15 in a worst-case scenario
- silver is still down from its all-time high of about $52 in jan 1980, then $50 in 2011.
- Silver will remain below $25.00 to end the year.
- Silver has been cheap for many years.
The bullish case for Silver remains in the macro-economic fundamentals. With Italian bonds hitting 7%, bond markets are clearly indicating that the Euro is out of favor with investors. And as such, silver in a safe haven perspective looks attractive. With such an outlook, the current pattern can be seen as bullish in context of the uptrend since October.
But with prices near a long term trendline and trending in a nice uptrend channel, price action may provide the clue as to whether this will be the pivotal moment in silver’s future trend. However, the breakout may prove to be a strong move
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