Is The Silver Price Due For Some Major Movement?

Friday, March 3, 2017

silver coins

The price of silver is typically volatile. Since the cost is much lower than that of gold, the price of silver can be open to wide swings thanks to investors looking to make some quick gains. But what’s been intriguing about silver’s latest movement is that it’s been a stable march upward—with none of the volatility usually associated with the silver price.

What does this low volatility mean exactly, and might it mean that the silver price is due for a major upward tick?

Silver’s Recent Performance

As of writing this morning, silver is slightly down. But the trend since silver’s lows in December has been that of a steady increase. A chart posted over at SeekingAlpha.com notes that silver had a rocky and volatile trip down to these December lows—but the recovery has been nothing if not steady.

What does this low volatility mean for the precious metal? It could simply be an aberration that doesn’t mean much for its future prospects. But it might also reflect a slow but steady confidence in silver that suggests general optimism for its prospects in 2017.

Don’t Forget That Silver Can Sometimes See Big Bumps

With the stability of silver recently, it can be easy to forget that silver is generally a volatile investment, prone to large-percentage bumps and dips along the way. This isn’t necessarily a bad thing—indeed, it can make for quick gains for some investors.

The trick is in predicting when these big gains will be made.

March doesn’t appear to be the month for it, not with the U.S. dollar making strides and the possibility of another rate hike in the middle of the month, which is traditionally bullish for the strength of the dollar and bearish for precious metals. What happens after that, however, is anyone’s guess.

All Quiet On The Silver Front

Although there’s been a lot of economic news this year, particularly with the Dow Jones Industrial Average seeming to break a new record every single day, the precious metal market has been humbly rebuilding on its losses from late last year. While silver is up a healthy amount, the slow rise of the precious metal seems to have let these gains pass under the radar for many investors.

But is this the quiet before the storm—in a positive sense for silver and gold?

Bert Dohmen, writing for Forbes, seems to think so. According to Dohmen, the overall bear market in precious metals since 2011 (which seemed to have ended in 2015 rather than 2016) could mean that there is a lot more upward mobility for gold and silver in the future. That could mean that gold and silver even rise as the stock market’s general trend moves upwards, as Dohmen does not see precious metals as a hedge against crisis but as a hedge against future weakness in currency.

This could all add up to a powerful year for silver. By the end of the year, March could simply be a small blip on the overall trend.

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.

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