Sun, Nov 27, 2022 @ 14:55 GMT
HomeContributorsFundamental AnalysisSilver is One Step Ahead of Gold

Silver is One Step Ahead of Gold

Silver is testing the $22 per ounce mark today and crossed it briefly yesterday. Although Gold marks the fifth consecutive session of back-to-back gains, Silver may have been one step ahead in this market cycle.

In early November, the price of Silver pushed up from the 50-day moving average, which had worked as a support for a week and a half before, as the metal was bought off intraday on dips under this line.

Further, while the S&P500 and stock markets, in general, were recovering from the not-so-dovish Fed comments, Silver rallied more than 7% on solid NFP data, leaving the other precious metals behind. This was a clear game-changer event for this market.

By rising in the following days, the price has reached its 200-day moving average, which Gold, S&P500 and EURUSD have yet to do. Since late last week, Silver has been gaining support on declines towards this line, confirming a change in the long-term trend.

Silver has already lingered near $22 in May and June, digesting the April collapse. There have also been repeated reversals in this area late last year and early this year. There might likely be some shake-out of market participants and partial profit-taking again.

The strong price momentum at the start of November and an even more impressive 9% rise in early October point to a demand, which might turn the market around. This bullish reversal is probably happening in Gold, but it is a more liquid and thus “noisy” instrument.

If we are correct, and after the local shake-out, silver goes further up, it could immediately target levels above $25, near the local peaks of March and April. If the strengthening does not fail again, the price may rise to $30 by August 2023.

It will be premature to talk about the possibility of reaching the highs of 2012 ($35) or 2011 ($50), but targets near $25 by the end of the year and $30 eight months later look achievable.

FxPro
FxProhttp://www.fxpro.co.uk/?ib=606792
FxPro is an award-winning online broker offering Contracts for Difference (CFDs) on forex, futures, spot indices, shares, spot metals and spot energies. FxPro serves clients in over 150 countries worldwide and offers multilingual customer support 24/5. Trading CFDs involves significant risk of loss.

Featured Analysis

Learn Forex Trading