Silver Price Trend Forecast Summer 2020
Commodities / Gold & Silver 2020 Jul 03, 2020 - 06:52 PM GMTBy: Nadeem_Walayat
Formulating a Trend Forecast
It is clear that Silver is NOT Gold, so NOT to make the mistake of looking at what Gold has done and thinking Silver will replicate that move, it rarely does! At best Silver tends to play catchup towards the end of precious metals bull trends.
Silver is in a strong bull trend off the March low that is targeting resistance at $19 and then $20, beyond which lies $21. The big question mark is can Silver break above resistance or not. Balance of evidence suggests Silver's going to correct before it is able to clear resistance.
Therefore the Silver price could top out at any point between $18.50 (last close) and $20, maybe reach $19.30 before weakening.
On the plus side, Silver is CHEAP relative to Gold which should contain any declines i.e. we are unlikely to see Silver revisit $11.64. UNLESS the Gold price takes a huge tumble at the same time.
What does my January forecast conclusion say for Silver? It says the forecast rally began in Mid March rather than Mid May, and thus the trend higher could terminate during late June rather than late August.
Therefore I am finding it very difficult seeing Silver sustain a breakout higher anytime soon.
Silver Price Trend Forecast Conclusion
Therefore my forecast conclusion is for an imminent peak in the Silver price, probably before Silver breaks above $20, though it is a volatile critter so could gave a false break to the upside before turning lower. Nevertheless, I don't see much upside in Silver after which the price is likely to revisit the $16.3 to $15 area as my forecast graph illustrates.
The bottom line is that Silver is in a 6 year long trading range of between $21 and $14. And we are all waiting for the breakout higher. For which there is a low probability of happening during 2020 as I stated in my January update. However, my long-term expectations remain of being invested for a spike to $35+.
So the strategy is to invest in Silver rather than to trade Silver, to accumulate when cheap and given the gold / silver ratio of 95, Silver is technically still cheap today relative to Gold. Just remember Silver tends to under perform Gold during most of the precious metal bull markets, and tends to outperform towards the end of powerful bull runs when retail investors start waking up and jumping on board, hence expect a series of spikes higher through resistance levels over the coming years, but not this year.
Disclaimer, I am invested in Silver (SLV)
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.
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