Is Silver Ready To Shine?
Dan Faretta | Feb 25, 2015 11:38AM ET
So far this year the silver market has looked pretty good, all things considered. When the stock market is at its highs you don't usually see the metals markets show any strength.
Since December, silver and gold each made a very nice higher and broke out of a recent consolidation. Silver is a very unique market because it is a precious metal as well as an industrial metal. That is the allure to investing in silver over gold.
Gold is only a precious metal and usually struggles when the stock market is in a bull phase. Since the economy is rebounding and looking pretty good right now, silver demand is increasing across all industries. In the US, the use of silver as a precious metal is only 6 percent of its total use. Electrical and electronics are the largest uses for silver in the US. Globally silver is gaining demand because of the huge transition to solar power as well as increasing cell phone demand. I could go on and on about the uses and how they are increasing but the bottom line it demand is increasing much more than for Gold. Silver is very cheap compared to gold and that is why so many industries are finding unique ways to use the metal. When global demand increases that can only mean that the price of silver should increase as well.
The technical picture of this market is very interesting. On December first the silver had a huge range day closing very strongly. Since December first silver had made a higher high and a higer low which is indicative of an uptrend. After the second higher high silver has retraced back to the consolidation from the beginning of this year. If the silver market can hold above the previous lows of 14.70 this market should remain in an uptrend with increasing demand.
As the market gains strength more institutional buyers will show up which will add some fire to this market. Look for buying opportunities near the December consolidation and risk the trade to below the 14.70 low.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.