Silver has confused bulls and bears since last summer, and that is certainly no understatement. We made a forecast last summer right after silver peaked, and we said were bearish. Our silver price forecast of $14 for 2017 got hit. The million dollar question is what’s next for the price of silver. It turns out that, if silver goes just a bit higher from here, that it would become bullish for the remainder of this year and even a large part of 2018.
Silver finally bullish after 6 years?
We see two potential factors to could make silver bullish. Note the words “potential” and “could”.
On the one hand it is silver’s price chart that shows a very interesting pattern. Point 2 on the chart is where are now. It is clear that silver trades at the intersect of a falling (purple) and rising (green) channel. Once the price of silver goes decisively above $18.80 it will move out of the falling (purple) channel. The rising (green) channel will be the key driver. Needless to say, in such a scenario silver will most likely move higher within that channel.
On the other hand it is intermarket analysis that could be driving silver in bullish territory. As said earlier this week we see the first signs of a new market trend which is based on intermarket dynamics: Safe Havens Are On The Rise. Gold moves higher and is trading at a major breakout level, the Japanese Yen is moving higher and about to break out, U.S. Treasuries are moving higher, stocks are getting more volatile. This clearly indicates that a cluster of assets are moving in the same direction, and that is what intermarket dynamics stand for.
How high can the price of silver climb in 2017 and 2018?
Does it mean that silver is going to the moon? Or that it will trade at $50 in 2018? Most likely not, is our answer. We see silver trading, at least potentially, in that green rising channel. By 2018 silver * could * potentially trading around $27 per oz, which is the top of the channel but also support from 2012 and 2013.
Smart investors are following very closely what happens in silver in the coming weeks.
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