Silver Price Analysis for Rest of 2020 | Will Silver Rise Again?

by birtanpublished on October 2, 2020

it's been a pretty volatile year for the
price of silver
um arguably more volatile than other
markets in what has been
something of a strange 2020 but given
where we're trading now
just what can we expect for silver for
the rest
of this year are we going to see it move
higher or sell off
uh into the end of december we do our
regular updates on silver
throughout the month but i thought we'd
take a longer-term look
at the price of silver we've seen this
move off these lows in march
from around 11.60
this sort of area almost traded up to 30
in early august so i thought let's take
a look at the longer term
picture for silver to put it into its
most recent historical perspective we've
got this chart going back
to 2007 and of course we had that run up
um towards 50
uh in april 2011 then then years of just
the price
uh sliding off so given the volatility
we've seen
this year and the price trading up to 30
what should we be looking for next are
we going to see a run back
up towards those old 50 highs or
actually
as the latest move got a bit out of step
and we do a correction i'll talk a bit
about
what to look out for then we'll come
back on and look to see if we can get
some trades set up
hello i'm david jones from capital.com
and i thought we'd take um
quite a long time look for silver really
i'm looking out
to the end of the year to see what we
might expect
from the price what's going to affect it
the big things to watch and the key
levels to keep an eye on
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proved to be really popular so i thought
well let's do another one and see what
the interest is
um but in this video we're going to talk
about that the longer term
aspects for silver i think it is a bit
of a futile effort to try and predict an
exact point
on an exact day in the future say
silva's going to hit 38.20
on the 17th of december but i think
there are things we can look at
that help us figure out what our
investing strategy should be
depending on the various movements of
the metal uh over the next few months
so half of silver production roughly
goes to
industrial demand a third goes to
jewelry so clearly
as we've seen this year you know if we
see the industrial demand
supply balance um upset that can have an
impact
on the price of silver you know coming
out of lockdown there was a
feeling that clearly uh some of the
silver mines have been affected by the
various coronavirus lockdowns
around the world so as the economy got
back uh to a new normal
there was worries about a squeeze and
demand and i think that's something that
that's definitely helped the price so
what happens with the economy over the
next few months
is one factor to bear in mind when it
comes to silver but
let's not forget of course investor
demand
for silver you know we have seen the
price pretty much rocket
since those uh those march lows down
around
eleven dollars an ounce or thereabouts
uh in the in the cash market in
financial markets
uh and up towards nearly thirty dollars
in very short order so
the part investors play uh is clearly a
major one here and that's going to
dictate i think um
what silva looks like from a price point
of view at the year end
there are plenty unknowns uh in the
months ahead the big one
is the economy if we see much weaker
than expected
economic recovery then that would you
would think
make investors nervous and that would
help normally
boost the price of what is seen as
defensive at assets the likes of silver
and gold so how the economy pans out
over the next few months is going to
play a major part
then of course there's the stock market
it's often said the stock market is not
the economy
but clearly have investors investors
have choices where they put their money
we've seen a very strong bounce back in
stock markets
since those uh march coronavirus
inspired lows and we've seen if you look
at u.s markets the nasdaq and the s
p have both moved out to fresh all-time
highs but we have seen quite a bit of
volatility
in the last few weeks and maybe a
concern that markets have gone too far i
think if we did see
again weaker economic figures maybe
started to unnerve the stock market
and prompted a bit more volatility and
perhaps even some weakness in stock
markets
going into the end of the year again
that's something that should boost
um you know alternative assets or
perfect
protective assets uh like silver i think
if we see the stock market
continue to race higher personally
i'd expect that to damp down uh any
demand or any investor demand out there
for silver so i think that's gonna play
its part as well then of course there's
the us dollar the us dollar since the
march
highs had been um pretty weak we've seen
the dollar
lose about 11 percent the dollar index
the the dollar against a basket
of other currencies we have seen uh
something of support
coming in for the us dollar over the
last couple of weeks but if that fizzled
out and we saw a weaker dollar
into the end of the year perhaps if the
u.s central bank
decide it has to do more to boost the
economy then that is something the
weaker us dollar that could help
the price of silver and then of course
we have the presidential
election uh coming up in november plenty
of unknowns around that we have had
surprises in the past the last
presidential election
of course so again some uncertainty
around this
is another thing that could make
investors consider
adding their weighting uh in the more
defensive
assets so i think even though we can't
say for definite
what's gonna happen with the market
there's enough uncertainty out there
i feel to support the price of silver
into the end of the year so from my
point of view from a trading point of
view and a
medium-term investing point of view when
we take a look at things in more detail
i'll be looking for opportunities to
perhaps buy in
on any volatility and we'll set some
trades up to do exactly
that so let's talk about the levels to
watch i think the immediate hurdle on
the upside
is those early august highs up up 29.85
i think
if we see a breakthrough there let's
call it 30 we could well have
an element of momentum building in the
market fear of missing out
the usual stuff and we could see this
market start to race higher
on the downside i think we've got lots
of support if we did see the price
sell off in the short term lots of
support coming in ahead of 20
to think about um getting in on a dip
but to put some color on these numbers
let's jump on the chart
as this is a longer term video i think
we're just going to focus here on the
price i'm not going to worry
too much about short term overbought
oversold like we do
with the uh the trading video so let's
just focus on the price action
i think what we've seen this year um
is clearly a tournament from the trend
over the last few years and arguably the
turnaround
did start um you know even before that
we had a period from 2016
uh up until recently where we'd had
silver in a fairly wide
uh sideways range and i think the fact
that this year
we've broken out through those old 2016
highs
around 21 dollars and broken through
plenty of other
previous annual highs as well you know
we've reached the best levels
since 2013 so we've seen seven year
highs
set this year for silver so i'm still
bullish you know i still think we're
going to see
the price of silver continue to gain
ground i'm maybe not going to start
sticking a pin
in 50 as the next target for silva but i
think at the moment
we've got some clear hurdles and for me
you know a clear strategy so what i want
to focus on
um is buying opportunities in silver
over the next few months as i'm
expecting this price
to continue to push higher but of course
not in a straight line
let's focus on what's been going on this
year so here's that trend off the march
lows and um you know i make no excuse
for looking at trends
we it served us very well in the gold
trades we've done
over the last year following that trend
higher and i expect to do the same with
these silver trades
you can see the price over the last um
month
or so has been caught somewhat in a in a
sideways range after the excitement
we had uh from the middle of july where
the price went went racing higher
so for me um there are three things i
could do here
i could just buy now so the price now is
trading at what 26.92 we do have
a trade on silver already so here's the
existing
uh silver trade buying 60 at 26.40 that
was back in um
august so about a month ago we last
bought into silver it's moved ahead 50
cents we're ever so slightly in profit
but nothing to write home about at the
moment so i do have sun exposure
to silver and in this i want to think
about where do i want to add
so i don't really want to just buy it
now where it's where it's trading now
because it looks like it could be
a little bit dull still for a while but
i want to try and take advantage
of any volatility and i think you know
for me
um that means buying into a dip you know
we've got had this trend line that's
done a great job
um off those march lows that trend line
is currently coming in
around the 22 mark you know somewhere
like that
so for me if we did see any sell-offs
down to 24
24 23 that sort of area then i'd like to
be
uh a buyer we haven't had any uh for a
while we've got to go back to mid-august
to see that sort of volatility
but i think one option for me here is to
leave an order in
at 24 and if the price does sell off
i'm happy buying in there and looking
for this trend to continue and perhaps
i give it a wide stop i put my stop
perhaps um
at twenty dollars you know the other
side of that trend line a fair old
distance away so that's one strategy
that i'm going to put in place now the
other thing i want to do in case i'm
completely wrong-footed
and silver does run off to the races
again
is be a buyer if it breaks through 30
dollars you know 30 was quite the hurdle
back in early august um and i think if
we do breakthrough there we will have
this um
this element this fear of missing out
this momentum driving the market so i
want to be on board uh if it does break
through
13. if we do see the breakthrough 30
perhaps i'll have a relative
is it a tight stop perhaps the other
side of 26. let's say 25. so i'm going
to buy
put an order in to buy at 24 with a stop
at 20
and ordering to buy at 30 with a stop at
25. let's just set that up then i'll
look at things in more detail
here's my first order buying 65 ounces
if the price runs up to 30. so if it
starts breaking out
i want to be in as soon as it breaks out
and put a stop in at 25 that's for a
risk of
our usual new risk of 250. let's just
place that order
and an order in if we get some weakness
i'm going to buy 80
if the price drops to 24 if that gets
filled put a stop at 20
again for around 250 pounds let's place
that order
so both of these orders are sitting in
the market you can see them on the chart
now pretty much
bracketing the price there's the 24 by
order there's the 30 buy order
and if silver carries on just stuck in
this tight range for some weeks then
then i'm not going to do anything
but if we do see a deeper selloff or a
breakout i'll be in on that and i think
when it comes to next targets i think
for me
if we can clear 30 then clearly there
has been a shift
in investors perception for the value of
silver and i'll be targeting
a run back up to at least 35
the september 2012 highs that's my next
target
for this trend up and silver and it's
only if it breaks below let's say
22 dollars an ounce do we have to worry
that the price of silver
has gone boring again and perhaps we're
gonna slip back into this old range it'd
been in
since um 2019. so for me the future you
know does look bright
for silver over the next few months it's
a little bit quiet at the moment
but i'm quite happy to add on weakness
and also to uh buy into strength and run
that existing position we've got
as well i'm just going to be patient and
wait to see what the market does next
that's it for the update we will see how
things pan out
over the next few months and of course
we will continue to do our regular
short-term updates on silver on this
channel but for now from me david jones
and
capital.com we'll leave things there
good luck with your trading
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