Is The Price Of Silver “Down For The Count” In 2016?

Friday, November 25, 2016

silver bars

Throughout the year, we’ve seen a resurgence in precious metals that has been extremely healthy for the price of silver. But with recent optimism in the markets—including the Dow Jones Industrial Average hitting 19,000 for the first time—precious metals have taken a hit. And now, silver investors are asking themselves if this is just a temporary dip, or if silver prices are really down for the count for the remainder of the year.

How Did Silver Perform Over Thanksgiving?

The Thanksgiving weekend is very active for some businesses and sectors, and very slow for others. With many people off for the four-day weekend, it’s not unusual to see little movement in some sectors. But how is silver performing today?

Today’s silver movement has seen it go up slightly—at least as of this writing on Friday morning. Gold and platinum are down, and silver remains below the $17.00 mark.

Although there was some talk earlier this week that silver had room to move, silver priced dipped on Wednesday and have yet to reach those levels yet again, despite ticking slightly upward to end the week. Economic Times in India noted that gold itself was losing interest as the strong dollar hurt its chances; it’s clear that the same concerns are hitting silver this week.

Silver Prices Seeking A Level Of Support?

Only yesterday, BullionVault wrote that silver was looking for a support base, or a level of prices that investors would be comfortable with. This support base would provide silver with a bottom from which to tick slowly upward. The only question is, what is the support base for silver, and have we hit it already?

With gold declining this week and silver showing at least some signs of life, there’s the possibility that silver has actually found this support base. But one week’s time is not enough to evaluate the potential future trends of silver; only to note where silver appears to be finding a bottom in the extreme short-term.

Silver Prices In Proper Context

If we’re going to put the current price of silver in its right context, we should look at where it’s been over the past month or so. Let’s look at the silver price chart, courtesy of BullionVault.com:

In this chart, we see that sliver prices dipped as the stock market showed plenty of life, particularly around the time of the election. Since then, silver has steadily declined, even though there may be some optimism in the markets this morning.

Although past results are no guarantee of future results, it’s clear that silver is generally hurting. That’s to be expected in an environment in which precious metals are taking a back seat to a more powerful U.S. dollar. With economic prospects on the rise and the Federal Reserve potentially primed to raise interest rates in December, it appears that silver prices might stick where they are for the short-term future. That suggests that silver may indeed be “down for the count” for the remainder of 2016—though what happens beyond that is anyone’s guess.

Darren Capriotti

Darren Capriotti has been a market analyst for the past decade and is an expert in precious metals. He prides himself on his ability to analyze the market and offer true value to investors with questions about gold, silver, and other precious metals. Highly educated, incredibly passionate, and more accurate than most, Darren offers a true, unbiased look into what investors can expect in the precious metals market. You can reach Darren at dcapriotti@gold-eagle.com.