• 509 days Will The ECB Continue To Hike Rates?
  • 509 days Forbes: Aramco Remains Largest Company In The Middle East
  • 511 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 911 days Could Crypto Overtake Traditional Investment?
  • 916 days Americans Still Quitting Jobs At Record Pace
  • 918 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 921 days Is The Dollar Too Strong?
  • 921 days Big Tech Disappoints Investors on Earnings Calls
  • 922 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 923 days China Is Quietly Trying To Distance Itself From Russia
  • 924 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 928 days Crypto Investors Won Big In 2021
  • 928 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 929 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 931 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 932 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 935 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 936 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 936 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 938 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Silver Market Update

Originally published September 29th, 2007

Even though recent action in silver has been very positive, with it finally breaking free from the shackles of its "Distribution Dome", short-term it looks set to react significantly in sympathy with gold, a scenario that is made a lot more likely by last week's sharp increase in the Commercials' short positions. The long-term outlook remains strongly bullish, so if the expected short-term reaction occurs it will be viewed as presenting another buying opportunity.

On the 2-year chart we can see how silver has broken free of the Dome pattern and by a considerable margin, so that the Dome is no longer a constraining factor. Nevertheless, it remains in a zone of substantial resistance and has become short-term overbought, as revealed by various oscillators, most notably the RSI indicator shown at the top of the chart. Thus, given that gold now looks set to react, it is probable that silver will get dragged down with it. With gold expected to react probably to the $700 area, a corresponding reaction by silver would likely take it back to the $12.50 - $13.00 area, where it will be considered a strong buy again, any such retreat also presenting another buying opportunity in silver stocks.

On the latest silver COT chart we can see the rapidly expanding Commercial short position, which can be presumed to have continued to increase later last week. This is increasing the chances of a smackdown soon, particularly as the Commercials short positions in gold have risen to a 1-year high by a wide margin.

 

Back to homepage

Leave a comment

Leave a comment