Only from June to the end of August this year, the price of silver increased by nearly 30 percent, which seems to be one of the better investments in this period. For comparison, the price of gold at the same time increased by about 20 percent. Another thing is that the silver market is less liquid than gold, and therefore even less capital can cause significant price increases.
Investors' interest in the gold and silver market is not diminishing due to the still tense situation between the United States and China. Precious metals seem to be the natural direction for capital that is looking for safer investments and a way to store the value of money in uncertain times. Bond yields are falling globally, which may further increase the attractiveness of gold and silver. Of course, these metals do not bear interest at all, but when bonds yields fall, they become more attractive.
Price of silver. H4 chart. Conotoxia trading platform
The chart shows such a strong trend that the price have even broken the upper limit in the upward channel. This can confirm the determination of demand and the growing scale of silver purchases. Broken upper limit in the trend channel may currently be the closest support for silver. Meanwhile, long-term resistance may be around the 2017 high at USD 18.50, which the price of silver seems to be approaching rapidly.
Looking at the history of silver prices, we last saw such a strong increase at the beginning of 2016. Then silver went up in seven months by more than 50 percent. If this story were to repeat itself, then with a similar increase in prices the destination could be around USD 21.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.