Is the Silver Price Slated For Another April In May?

Tuesday, May 10, 2016

It’s no secret that the price of silver saw some fantastic increases in April. If you’ve been reading this space for long enough, you’ll recognize that there have been few investments this year as profitable as silver. Silver prices gained 15% in April, after all, a significant jump that has some investors wondering whether the price of silver may be headed to $20 and higher.

That would require a May as strong as this year’s April. So far, the results are mixed. Yesterday’s gold bullion prices, for example, struggled to find a footing, while the price of silver didn’t fare any better. But is this just a blip on the radar, so to speak, or might investors still find their confidence in silver justified throughout the month, with June 1st as a target date? Let’s take a look at the news and see what’s happened for silver in May thus far.

Expectations Of A Fed Rate Hike

One of the most important determinants regarding how investors feel about gold and silver is what the Federal Reserve is doing. Recently we saw that in their April meetings, the Federal Reserve held off on any action, not quite ready to lift interest rates, ostensibly because the economy might not be able to tolerate it quite yet.

Recently, according to Profit Confidential, the President of the New York Federal Reserve, William Dudley, said he believed that rate hikes later in the year were very much on the table. Anyone who follows gold and silver prices knows that this can be a somewhat bearish outlook on the two precious metals.

Optimism For Silver, Measured Out In Years

What is one bad Monday and one mixed Tuesday morning to the price of silver in the long term? As it turns out, not much at all. Like many investments, a temporary move up or down will be cited by people who believe their predictions are coming true. What really matters is how you see your individual timeline and your individual portfolio.

Consider that Peter Krauth of Money Morning sees silver as a very optimistic buy over the next four to five years. Although variables like the movement on silver do seem to indicate that investors don’t see as bullish a month for silver as we saw in April, that doesn’t mean that the long-term prospects for the precious metal have been harmed.

How Bad A Start To The Week Was It, Really?

Finally, it’s important to note that silver seems to be moving sideways. No, it’s not the most bullish opening to a month that the precious metal has ever seen, but that doesn’t mean that your investments in silver have maxed out and need to be sold immediately, either. With some investors seeing some resistance at silver prices higher than the current trading value, silver may still be slated for a positive month overall. It might not jump 15% again throughout the month, but, then again, a month can sometimes be an arbitrary measurement of a precious metal’s long-term trading outlook.

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.