Silver price discussion and analysis

[greggles]

Looks like a change of trend for silver with the recent downtrend finally broken.

 

[Sean K]

Looks like a change of trend for silver with the recent downtrend finally broken.

View attachment 180020

And the PM train has only just left the station.

 

[greggles]

And the PM train has only just left the station.

Silver bounced off previous resistance and now support of US$28.75 and is heading back towards previous highs. A break above US$32.15 on heavy volume would be very bullish and would probably trigger a lot of short covering which would likely support any breakout.

Another scenario is a continuation of the current range trading within the above channel. Tonight's trading will be interesting.

 

[noirua]

 

[mullokintyre]

What just happened?
Silver just shot up 40 cents to well above 31 bucks, Gold shot above 2400 at the same time!
Mick

 

[finicky]

I'm buying (not literally) the take that the Fed will act politically and provide some twisted rationalistion for cutting the rate before the Potus election in order to give the Demos a chance. Hence a take on that from skeptics that the US dollar will be further weakened, inflation fanned and 'real rates' narrowed, favouring ptecious metals.

Held

Gold Prices Forecast: XAU/USD Jumps as Fed Hints at Rate Cuts Ahead of CPI Data

The current trend in monetary policy and sustained gold demand indicate the ongoing bull market in XAU/USD could persist.

www.fxempire.com

 

[greggles]

Silver getting hammered alongside gold today and is just managing to hang on to support at US$29. This week has seen some serious volatile trading in precious metals and this may be something that becomes a feature of the market as the US Presidential Election gets closer.

It's a real battle between bulls and bears at the moment and it seems that control swings from one side to the other frequently. If silver can hold US$29 it would further solidify that level as strong support.

Interesting trading ahead.

 

[mullokintyre]

Stockhead in the Australian is pushing the silver story with some comments on silver related stocks.

The silver price has been on a tear this year, but unlike its more popular cousin gold, it’s still well short of all-time highs.

As of Friday, the silver price was up by around 30% so far in 2024, versus gold’s 18% rise.

Sitting at around US$29 an ounce, silver is still a long way off the record highs of close to US$50/oz reached in 1980 and again in 2011.

But unlike gold, demand for silver is surging due to its growing industrial use.

Earlier this month, Baker Steel Capital Managers described silver as the potential “unsung hero” of the energy transition.

“Silver faces one of the most significant structural demand trends as a result of the clean energy transition, yet the magnitude of the long-term market imbalance remains under-appreciated,” it said.

The reason for this is silver’s use in solar photovoltaic cells. Each solar panel can contain up to 20g of silver.

While total silver demand dropped 7% to 1.19 billion ounces last year, industrial demand grew by 20% to a record high of 445.1 million ounces, according to The Silver Institute. Use in PVs surged by 64% to a record 193.5Moz.

“This is a large increase, yet it is the exponential growth facing the solar energy sector which gives a glimpse into the incredible demand dynamic underway for silver,” Baker Steel said.

Positive forecasts

The Silver Institute is forecasting a 2% increase in total silver demand this year, driven by a 9% increase in industrial demand to a new record high.

It expects silver supply to decline by 1%, leading to a projected deficit of 215.3Moz, the second largest in history.

Baker Steel is forecasting solar PV demand to account for 23% of silver demand this year, increasing to 29% by 2030.

Its analysts expect the boom in solar demand could lead to massive deficits of 1.4-1.6Boz by 2030.

Analysts are increasingly bullish on silver.

Citi has forecast the price to reach US$38/oz in the next 6-12 months.

Canaccord Genuity recently raised its 2025 silver price forecast by nearly 20% to US$31.60/oz, while Macquarie lifted its forecast by 12% to US$32/oz.

ASX silver exposure

Many ASX investors have steered clear of silver plays after being scarred by several failures earlier this century (anyone remember Macmin Silver?).

However, there is a fresh crop of developers aiming to capitalise on surging demand.

Adriatic Metals (ASX:ADT) recently started production at its Vares mine in Bosnia & Herzegovina, while Manuka Resources (ASX:MKR) is aiming to restart the Wonawinta mine in New South Wales next year.

This will require some good cash flow from the Mt Boppy gold mine to have any chance of reopening Wonawinta.
Awaitng the Junequarter results to give me a better idea on whether its realistic.

Investigator Resources (ASX:IVR) and Silver Mines (ASX:SVL) are undertaking definitive feasibility studies on the Paris project in South Australia and Bowdens project in NSW, respectively, with the latter securing $30.2 million in convertible debenture funding from an investment fund backed by Rick Rule and Harry Lundin last week.

Eric Sprott-backed Unico Silver (ASX:USL) and Steve Parsons-backed Andean Silver (ASX:ASL) have large resources in South America.

The newest silver explorer on the ASX is Sun Silver (ASX:SS1), which listed in mid-May following an oversubscribed $13 million initial public offering at 20c per share. Its shares have since traded as high as 75c and are currently sitting at just below 50c.

The company owns the Maverick Springs silver-gold project on Nevada’s Carlin Trend, which has a resource of 292Moz of silver equivalent at 72.4 grams per tonne AgEq.

It makes Maverick Springs the largest early-stage silver development project on the ASX or TSX.

That resource was estimated using metal prices of US$21.50/oz silver and US$1850/oz gold – substantially below today’s levels.

There’s also substantial mineralisation outside the constrained pit shell and the deposit is open along strike and at depth.

Earlier this month, the company kicked off a 7500m drilling program, the first work on the project in 15 years.

About 60,000m, or 200 holes, have been historically drilled at Maverick Springs but drilling to date has only covered 20% of the project area.

As well as infill drilling, the current program will target high-grade zones to the north-west of the resource boundary.

The first results are due in the coming weeks.

Have put in a small stake in SS1, but it is early days yet.
Mick

 

[greggles]

Silver has well and truly broken down but the volatility in precious metals at the moment is off the charts. Silver is going through some wild swings, which can make for good trading as long as you are on the right side of those swings.

Hard to know where silver is going in the short term. I keep waiting for it to bounce back but the bearish mood at the moment is keeping a lid on things. Too many sellers right now and many buyers are on the sidelines waiting to see where things go. The US$26.50 area is proving to be good support and if that failed I could see silver going back towards US25, but I'm not convinced that it will get back there. My gut feeling is some larger players are buying heavily at current levels. I'm thinking mints and industry are probably taking advantage of the softer prices and securing the supply they need. The silver supply deficit is still very real and I feel it will limit the downside from here.

 

[mullokintyre]

Silver has well and truly broken down but the volatility in precious metals at the moment is off the charts. Silver is going through some wild swings, which can make for good trading as long as you are on the right side of those swings.

Hard to know where silver is going in the short term. I keep waiting for it to bounce back but the bearish mood at the moment is keeping a lid on things. Too many sellers right now and many buyers are on the sidelines waiting to see where things go. The US$26.50 area is proving to be good support and if that failed I could see silver going back towards US25, but I'm not convinced that it will get back there. My gut feeling is some larger players are buying heavily at current levels. I'm thinking mints and industry are probably taking advantage of the softer prices and securing the supply they need. The silver supply deficit is still very real and I feel it will limit the downside from here.

I too have been poised to buy into silver stocks, but I need to have some reasonable level of confidence in it going the other way rather than down.
At some point I will say to myself, thats far enough and will buy anyway , even if there is a possibility of it going down further.
I have not reached that point.
When SVL is below 14, ARD below 0.013 , or SS1 gets below 0.41, that will probably be my time.
Mick

 

[mullokintyre]

I too have been poised to buy into silver stocks, but I need to have some reasonable level of confidence in it going the other way rather than down.
At some point I will say to myself, thats far enough and will buy anyway , even if there is a possibility of it going down further.
I have not reached that point.
When SVL is below 14, ARD below 0.013 , or SS1 gets below 0.41, that will probably be my time.
Mick

Well, none of those low targets were reached before silver started its next upwards move.
Had to settle for some ARD at 14. and a few SS1 at 42.
Mick

 

[LeFeek]

Silver has well and truly broken down but the volatility in precious metals at the moment is off the charts. Silver is going through some wild swings, which can make for good trading as long as you are on the right side of those swings.

Hard to know where silver is going in the short term. I keep waiting for it to bounce back but the bearish mood at the moment is keeping a lid on things. Too many sellers right now and many buyers are on the sidelines waiting to see where things go. The US$26.50 area is proving to be good support and if that failed I could see silver going back towards US25, but I'm not convinced that it will get back there. My gut feeling is some larger players are buying heavily at current levels. I'm thinking mints and industry are probably taking advantage of the softer prices and securing the supply they need. The silver supply deficit is still very real and I feel it will limit the downside from here.

The volatility is crazy, but like you said, it can be a trader's dream if you're on the right side of the swing. I've been waiting for a bounce too, but the bearish sentiment is definitely keeping prices in check. That $26.50 support level is key, and if it breaks, $25 could be next. But I'm with you, I think there are some big players scooping up silver at these prices, probably mints and industry taking advantage of the discount. The supply deficit is still a major factor, so I'm not convinced we'll see a huge drop from here.

 

[Sdajii]

The volatility is crazy, but like you said, it can be a trader's dream if you're on the right side of the swing. I've been waiting for a bounce too, but the bearish sentiment is definitely keeping prices in check. That $26.50 support level is key, and if it breaks, $25 could be next. But I'm with you, I think there are some big players scooping up silver at these prices, probably mints and industry taking advantage of the discount. The supply deficit is still a major factor, so I'm not convinced we'll see a huge drop from here.

If I was just looking at the silver chart, I would be pretty concerned, but given silver follows gold and gold looks really good, I'm not expecting $26.50 to fail.

I can't see gold going below $2,300, probably not below $2,340, and at any time it could potentially break the $2,500 figure which will be an all time high (of course it will, it's just a matter of when) and it could then go for quite a run, with multiple TA targets around $2,800-$3,000. When that happens, silver will follow upwards. We all know that is going to happen, it's just a matter of when, so it's likely not many sellers will be keen to sell too cheaply. Of course, the market can be crazy and in the short term anything could potentially happen.

 

[mullokintyre]

Chuck Butler, bless his age ridden soul, is once again talking about a short squeeze on silver.
I have heard this many many times, and have hoped that it might be true, but alas have always been disappointed.
One day he will be right, its just working out which of the days it is.
As most Silver produced is a byproduct of mining metals like Zince lead and Nickel, its supply is somewhat tied to the price/supply of those metals.
With a lot of Nickel, Lead and Zinc mines being put into care and maintenance due to low prices, the supply side is contracting.
Unlike Gold, Silver is an industrial metal and lots of it gets consumed.
At some point , a real shortage will develop, and we are off to the races.
Its just we don't know when.
So its a long term suffering hold.
Mick

 

[Sean K]

This is a few months old but the first half talking about silver and the silver market is pretty good. RR always easy to listen to.

 

[greggles]

Great bullish day on Friday. The close at the high of the day indicates that we could see continued bullish price action in the coming week. US$30 is back in the crosshairs. Let's see what tomorrow brings.

 

[Sean K]

Great bullish day on Friday. The close at the high of the day indicates that we could see continued bullish price action in the coming week. US$30 is back in the crosshairs. Let's see what tomorrow brings.

Yes, looked good. I was hoping this line was going to be support on the way back down and it was for a few days, but collapsed. Now, going to be a bit of a speed bump.

Silver still trailing gold a little. If gold hangs around ATHs then expect silver to catch back up to 32. Not sure what the silver gold ratio is right now, but I think silver has been below historical trend for a while.

 

[Sean K]

Speed bump jumped perhaps? Back to support.

 

[greggles]

The silver price is slowly creeping up on US$30 tonight like a predator creeping up on its prey. I think tonight will be the night it breaks above that level again. The price action tonight feels like buyers are in control and in an hour or so we should start to see some serious volatility as the US market starts to wake up.

 

[Sdajii]

Speed bump jumped perhaps? Back to support.

View attachment 182877

Lots of volatility lately for silver, and I doubt it's going to stop any time soon. It generally follows gold's pattern with different amplitude, but it has diverged lately. Gold is seeing a run this year for several reasons, some align with silver (safe haven/store of wealth, some run against silver (silver is also an industrial commodity to a far greater extent). The silver price doesn't know which way to run. I've never been in precious metals before this year, I conceptually don't like arbitrary assignment of value to something which gets stored as inert bars, but it was just clear that they were both good buys earlier this year so I jumped in. Gold is a more sure thing, silver more risky but with much more potential upside. Silver's zigs and zags are harder to predict but it should do well over the longer term.

I'm not 100% sure it will play out but I have a TA target around US$40 for silver, maybe very roughly by late 2025. Potentially it could go a lot higher if things fall into place.

Gold has been hitting multiple all time highs lately, but silver is still nowhere near its all time high hit in January 2011 of almost US$50, and it even hit close to $50 back on new year's day 1980. I doubt it will happen but it wouldn't be the strangest thing if silver hit $70-80 in the next year or two, and relative to that there's very little down side.