After waiting for seven years since the silver price traded above $30,
precious metals investors are wondering if 2019 will be the year that shiny
metal finally enters into a new bull market. However, for silver to
enter into a new bull market, certain signs and indicators need to take
place. I discuss this in detail in my latest video.
Interestingly we have seen several precious metals analysts suggest that
something quite interesting is taking place in the silver market. For
example, Alasdair Macleod wrote an article;AWhale Is Accumulating Silver Futures,
implying that the Chinese government may indeed be acquiring a significant
long position in the silver market. Macleod believes China may
be going long silver, via the futures market, to protect its supply by
hedging as the price heads higher in the future.
So, how can we tell if silver is entering into a new bull market?
Well, the biggest indicator tends to be the price. While physical
supply and demand factors impact price, we have seen years in which demand
fell during rising prices, but also surged during extreme selloffs.
Thus, it’s important to look for key price levels that will signal that
silver has begun a new bull market.
The silver price has been impacted by fundamental and technical
analysis. As I have mentioned in recent articles, I dismissed technical
analysis for years as I thought it was nothing more than reading tea leaves
or goat entrails, as a commenter stated. However, after I spent the
past year watching and studying the day trading markets, I realized that
stocks were bouncing off moving averages, technical levels, and formations…
DAY IN AND DAY OUT.
When I went back and looked at the long-term gold and silver
charts, I saw that the large price BREAKOUTS occurred at certain key levels. Why
was this the case? Well, it seems that when the gold or silver price
broke above a key level, it came on the RADAR of traders, hedge funds,
investors, and institutions. Thus, breaking above or below these key
levels brings on a great deal more interest and trading volume.
Basically, when the gold or silver price finally pushes above a long-term
resistance level, EVERYONE WANTS IN. And, it’s not just in gold and
silver. The market pays attention to these key levels IN ALL STOCKS
& COMMODITIES.
So it’s essential to understand that while the fundamentals are
the underlying drivers of price, the key technical levels provide the BIG
PUNCH or huge increase in BUYING or SELLING depending on the technical setup. I
ignored this information for years, but will no longer.
Does that mean that I am no longer interested in fundamentals? Hell
no. Actually, I am interested in the fundamentals more than ever.
However, technical analysis will provide us some with clues to how silver
will BREAKOUT to new highs in the future. Furthermore, when the U.S.
and world experience peak oil, the impact on most assets will be quite
negative. BUT… this will be shown in the charts as Stocks, Bonds and
Real Estate lose value while gold and silver move up in the opposite
direction.
In my newest video,SILVER PRICE BREAKOUT: Key Levels To Look For
In 2019,I explain in detail how the past silver price spikes
occurred at crucial technical levels and will do so again in the future:
The key technical levels are important to keep an eye on because the PAPER
BUYER or SELLER drive the majority of the silver market price. This
shouldn’t be a surprise because only 1% or less, of investors, purchase
physical gold and silver.
One of the charts I discuss in the video is the long-term silver chart
with two crucial moving averages and the important lower trend line:
In the 20-year monthly chart of silver, the price has been bouncing off
the lower rising trend line (blue dashed line) since
2004. Not only is this an important technical level for silver, but it
also shows a BOTTOM for the price as $15 is now the average cost to produce
an ounce of silver by the primary mining industry. If we go back
to 2004, the primary silver mining industry was producing silver at about $5
an ounce. Thus, the cost to produce silver has tripled in 15 years… AND
THE TECHNICAL LEVELS SHOW IT.
Lastly, I explain why the silver price must push above these two moving
averages to be in a new bullish trend. However, for silver to be in a
NEW BULL MARKET, I believe there is a certain key price level that it needs
to rise above.
Please check out my newest video to get all the details.
