Commodity Trade Mantra

Silver Prices Setting up to Reward Investors Big-Time

Silver Prices Setting up to Reward Investors Big-Time

The Last Time This Happened, Silver Prices Soared 900%

Charts Show Big Gains for Silver Prices Ahead

Silver prices are up more 45% year-to-date. Could the gray precious metal go even higher? I say, yes. If you look at from a technical analysis point of view, silver prices could be setting up to reward investors big-time.

First, look at the daily chart of silver prices. There’s one thing readers should pay close attention to here and that’s the volume (at the bottom of the chart) and the direction of silver prices.

Silver - Continuous Contract CME

Chart courtesy of

As silver prices increased, the volume increased as well. From a technical analysis perspective, this is exactly what you want to see in markets where prices are soaring. It says that buyers are strong, they are excited, and they could drive the price higher.

Next, look at the weekly chart below. It suggests a bullish outlook for silver prices as well.

Silver - Continuous Contract

Chart courtesy of

Take a close look at the two moving averages: the 50-week moving average in blue and the 200-week moving average in red. Silver prices are now above both of these moving averages. At the very core, this says that the silver prices are trading above their intermediate- and long-term trends.

With this said, keep this most basic principle of technical analysis in mind—trend is your friend.

Also note this: the last time silver prices crossed above these moving averages, it was back in 2009. After that, we saw a massive move to the upside.

Mind you, I’m not saying silver prices will move because of these moving averages; I just believe that they act as a good indicator of where the precious metal’s prices could go next.

Lastly, look at the very long-term chart of silver prices below.

Silver Price CME

Chart courtesy of

There are two things investors should be watching very closely here:

  • The first thing to watch is that the long-term trend continues to point upwards—in favor of those who are bullish.
  • The second is that silver prices are bouncing off their 200-month moving average. Last time silver prices crossed over and rose above this moving average, we saw a jump of close to 900%. Could we see a similar move this time around as well?

Silver Prices Outlook for 2016, 2017, and 2018

Looking at just the technical analysis, if you are bearish on silver prices, I suggest you think again. They suggest a bullish sentiment prevails and silver prices could go much higher. It shouldn’t be shocking to see $30.00-an-ounce silver by the end of 2016.

In the long run—and looking at both the fundamentals and the price action—silver is setting up to reward investors big-time. I am not ruling out silver prices back up at their 2011 highs around $50.00 in the next two to three years.

With all this said, I can’t stress this enough: silver miners are going to be the ones where big returns will be made.

Don’t think this could happen? Look at Coeur Mining Inc (NYSE:CDE), for example, a well-known silver mining company. While silver prices are up 45% year-to-date, CDE stock has skyrocketed roughly 380%. In other words, for every one percent increase in silver prices, Coeur Mining’s stock increased 8.44%!




Courtesy: Moe Zulfiqar

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request your views on the above article

  • theusualsuspect

    I’d be shocked to see it over 30 myself, but it is speculative driven investments. I’m hoping it hold around 20 this year.

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