Using this theory on the pattern that is illustrated in the above chart creates a potential price objective of $18.90. The theory surrounding this pattern states that a price objective can be obtained by taking the depth of the head and extrapolating that value above the neckline that completed the pattern. This pattern is instrumental in providing the direction of the next move, as well as providing a potential price objective for that move.
The pattern is completed when the price closes above the neckline and indicates that a trend reversal is at hand. The neckline is formed by connecting the reaction highs. This pattern is suggesting that the selling in this precious metal has concluded, and that a higher silver price is likely to follow.Īn inverse head and shoulders pattern consists of three troughs and a neckline, where the middle trough (the head) is the largest, and the first and third troughs (the shoulders) are usually of equal size. The following silver price chart illustrates the price pattern that is suggesting that higher prices are a likely outcome.Ī technical pattern that is referred to by traders as an “inverse head and shoulders” pattern has developed on the silver price chart. The rules set out by this method of investment analysis are implying that the technical indicators and price patterns now apparent on the silver price chart are suggesting that a rally is likely to ensue. The use of technical price patterns to discern trends and forecast future prices is known as technical analysis. This could come at a time when technical indicators from the silver price chart support the notion of a higher silver price. dollar price would translate into higher precious metal prices. dollar sits in a precarious situation that increases the odds of a selling event gripping the dollar and driving it lower. “Stocks and ETFs are convenient, but their performance is dependent on more than just spot prices,” and when it comes to ownership of the physical metal, storage and portability are key concerns, he says.In one of our previous publications, “ Perfect Ingredients for a U.S. If inflation remains “high and persistent, expect more investors to hedge their portfolios with some silver,” Moy says, and those looking to mining stocks, ETFs, or owning the physical metal will have to decide what works best in their portfolio.
Silver mining stocks and exchange-traded funds also have their place in a “savvy investor’s toolbox, but owning the physical metal gives the investor a tangible asset without having to factor in management,” he says.
Mint climbed from a prepandemic level of 14.9 million in 2019 to 28.3 million last year. Moy points out that sales of American Eagle silver one-ounce coins at the U.S. The Silver Institute, meanwhile, also expects physical silver investment demand to rise by 10% in 2022 to 290 million ounces, according to Michael DiRienzo, executive director at the Institute. Likely triggers for a breakout move this year include geopolitical and monetary concerns, inflation issues, and growth in silver demand, says Cuggino.ĭemand is expected to come from both traditional and cyclical businesses, as well as from emerging green industries-providing a “strong long-term demand picture for industrial use,” he says. Still, silver futures have been generally stuck in a less than $5-an-ounce trading range since August. Michael Cuggino, president and portfolio manager of the Permanent Portfolio Family of Funds, believes that 2021 served as a “basing and consolidating year” that provides a “good entry point for a long-term investor” in either silver or gold, both of which saw prices fall last year as inflation began to emerge but was “explained away as transitory.” “Yet when we compared returns since the end of 2020, copper is up 28%, gold is down 2%, and silver is down 12%.” That implies silver prices should be much higher, he says.įor silver just to catch up to half of copper’s performance, that would imply a silver price near $25.50 an ounce, says Minter. “Because of the demand sources, silver can be thought of as half gold, half copper,” says Minter.
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