Silver Price Analysis September 2020 | Silver Breaks Barrier!

by birtanpublished on October 2, 2020

We've seen this fantastic rally in silver over the last five months from these march lows uh down below twelve dollars the cash price of silver in financial markets uh traded up to a seven year high in august i'm almost getting to 30 dollars but quite a bit of volatility since then but at the time of recording being beginning of september it's within a dollar or so of that seven year high from august so the question is are we gonna see a breakout from there we're

Going to see silver power ahead again or actually is now the perfect time to sell short because we're going to see a failure ahead of 30. some great moves in silver over the last few months and it got really explosive from sort of the middle of july onwards when silva was trading around 18 an ounce and we saw it push up towards 30. pretty sharp reversal off that level off that seven year high dropping um was it more than 20 percent down below uh 24 an ounce within a week or so but

But since then we've seen it consolidate and we're seeing it really picking up at the time recording trading at its best levels since the middle of august so it's really interesting up here if we take this chart out so i've gone right back here to include those um april 2011 highs um around 50 perhaps just shy of 50. but you can see where we are now we haven't been here in silva we've got to go back uh sort of what the first quarter of 2013. so it's

Going to be a really interesting market from these levels as usual the question is uh buy or sell up here i'm going to put a trade on in the second part of the video first of all let's look at the existing trades we have already so we've got quite a few trades uh running at the moment we've got a gold trade uh from the middle of august here's silver from the middle of august brought in at 26.41 a couple of dollars in profit so up about 100 pounds uh

On that trade there that the big winners at the moment we have this apple trade that's been running for a while that's up about 700 and a couple of euro trades running so benefiting from that from the dollar weakness so we don't have that much exposure to silver so we're going to see if we can change this in this video i'll talk a bit more about what's been driving it then we'll come back and look at things in more detail hello i'm david jones from capital.com and it's time for our update on the

Price of silver as you saw there we've seen some strong moves over recent months and it looks like it's threatening that that recent seven year plus higher it's set so in this video talk about what's driving it a bit more then we'll jump back onto the plot onto the chart look at things in more detail see if there's a trade to be done i think there clearly is up at these levels and get that uh set up as usual if you're watching this and you haven't subscribed if you could

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But let's get into it let's talk about what's been happening with silver the levels to watch and uh get back onto the platform so at its recent peak uh the price of silver had rallied from that march low by a hundred and fifty percent so that really is an enormous move in silver the question is is there more still yet to come so this means that silver is trading at pretty much its best levels for more than seven years i think we've got to go back

To about february 2013 to see silver higher than where it's been over the past few weeks of course during august we saw gold hit fresh all-time highs bursting through two thousand dollars an hour so plenty of interest in the precious metals um up at these levels and over recent weeks and the question is um is a topping or actually are we gonna see these metals including silver moving much higher from here i've talked about it before but um we're saying with a reopening of

Economies uh the speculation that we're going to see industrial demand for silver picking up of course it's not just a shiny metal thing it does have applications out there in the real world and i think there is a feeling that as we get back to a new normal we'll see demand pick up and this has been coupled with fears over lack of supplies you know um mining operations weren't immune from being shut down we saw plenty of mining operations around the world uh being locked down during the height

Of the coronavirus pandemic so again there's been a feeling that perhaps there's been something of a lack of supply when it comes to silver so lack of supply increased demand you know we have the classic uh price price moving higher plus also helping it is is the us dollar i talked about this uh in the goal video but at the time of recording the us dollar is at its worst level for two years if we look at the dollar basket that's the dollar against a basket of different currencies uh the

Euro the power and the yen uh all of those it's trading at levels not seen since 2018. so pressure on the us dollar because of uh the fair to the central bank's commitment to to lower interest rates has lifted assets um such as silver and gold that are quoted in dollars that's definitely helped so let's talk about the levels to watch i think we've got these august highs first of all is the next obvious hurdle around about 29.85 and i put in a psychological

Level of 30 after that because i think that could be something of a problem i think if we break out through there we're then looking back to january 2013 the next sort of previous major peak uh on the longer term chart for silver on the downside lots of support levels left if we did see it sell off i think the first major one of these is only from the last week of august but coming in at 26 so um let's put some color on these numbers get back onto the platform look at things in more detail set a trade up so let's take a look at

This chart i've gone back uh to about march 2019 and we had that great run-up last summer of course the price actually peaked um it's almost bang on a year ago around about 19.35 that sort of area and then sold off really sharply of course this year is that there's the pandemic spread around the world risk-off attitude across all sorts of markets and here we are now so i think what's important to focus on is clearly what's been going on since march of this year i've drawn that

Trend line in there let's just zoom in and take a look at things in a bit more detail so we've been tracking this trendline on the way up it's done a great job we've got a few touches on that trend line and then the last couple of weeks of july is when it really started accelerating that trend line at the moment is coming in around the 22 mark so even if silver dropped um six dollars from where we're trading now it's still

In that overall trend that's been in place uh since since the march lows and we've got various other supports we'll look at those in a minute when we place we're looking to set the trade up looking at the rsi down here not surprising went um overbought from right from early in july so if you were waiting for the rsi uh to come out overboard you missed out on a chunk of the move and this is the problem as i often say with these uh sort of overbought oversold indicators in a strong trend

That go overboard uh far too quickly so we have come out uh i've overbought as the market sold off from that seven year high at the moment the rsi is uh stuck uh below the 70 mark so hasn't quite entered overbought but i don't think it's too important given the momentum in this market what i want to base the trade on is the price action so what i want to focus on really is probably what's been happening the last couple of months there's a couple

Of ways of playing this if you really wanted to go short silver so it's currently trading at around about what 28.85 you could go short and put a stop loss the other side of that 30 level you know just above those uh those seven year highs we saw in august but for me the trend is still strong so i want to be a buyer the only question is i think there are there are three ways i can look at this do i buy now uh where it is now just jump in do i wait to see if we get a pullback

Back to maybe the 24 26 area or do i wait for a breakout uh through dollars let's just zoom in on the last couple of months look at a short-term chart on hourly chart and see if i can make my mind up so the trade i'm going to do here i've got one trade running on silver already i am going to trade the breakout so i want to buy but i want to say perhaps a bit more momentum from here i don't want to see it get stuck ahead of those old highs so those old

Highs coming in 29.85 i said but i was talking about the levels i'm gonna put an order to buy at um 30.20 so it's got a punch through the 30 mark by 20 cents the only question after that is where do i put my stop loss we could pick up on this trend that's been going on since um late august let's just put our trend line on there so i suppose for shorter term traders that's that's one thing to watch we've got that short-term trend line coming in

Just below 28 but for me when it comes to placing my stop-losses if i'm going to trade a breakout through 30 at 30.20 um so where's my stop going to go so the closest i'd want it uh below 26 is one place i think the last uh sort of major support towards the end of august that's probably one place for a stop-loss i could go a bit wider put it down here below those uh mid august lows but i am going to choose this sort of 26 area as my stop so i'm

Going to end up having a wide stop here but i'm trying to catch the next major move in silver so for my buyer at 30 20 i'm gonna put a stop down at um 25.75 and look to move that fairly quickly if the price gains momentum let's just set that up then we'll look at some targets in a bit more detail so i'm ready to go the price is currently trading at 28.90 um i want to see a breakthrough 30. so i've put an order in to buy at 30 20. uh and then if that order gets filled

I've put an order to put a stop loss in at 25.75 and that's for our new risk we've upped the risk on these trades 250 pounds risk per trade because the account has grown in value so um that's it i'm ready to go let's place the place the order to sit at 30 20. so that's it the order is placed buying 76 of silver if it gets to 30 20. let's take the chart out and look at some possible targets i think the next major hurdle it's probably these early 2013

To last quarter of 2012 highs so i'm looking at sort of 32 to maybe 35 as the next interim target for silva if this trend continues and i think it's only if we take out those recent major lows which is still 20 below where we are now that we have to worry about a reversal in silver but it's gonna be a really interesting month to see if we can crack uh these previous seven year highs just below 30 and move higher still from there that's it for this update in silver we'll see

How it goes during september but from me davidjones and capital.com good luck with your trading for more trading videos just like this please subscribe to our channel

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