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Silver - Losing Its Shine?Silver commands value both as a precious metal and an industrial metal. Silver is often considered as a poor man's gold. According to the Silver Institute, Silver is used in solar cells (also known as photovoltaic cells which convert sunlight into electricity), electrical switches, and chemical-producing catalysts. Its unique properties make it nearly impossible to substitute and its uses span a wide range of applications. Every computer, handphone, cars, and appliance contains silver. Near-term headwinds for photovoltaic manufacturing in China combined with a strong US Dollar are expected to weigh down on Silver prices in the near term. Our short-term outlook for silver is bearish. With a price rally over the past two weeks, we expect prices to retrace in the near term providing a compelling entry for a short position in Silver. SILVER’S VALUE DRIVERS Silver has been considered a precious metal for several centuries. However, in the modern economy, silver is valued as both a precious and an industrial metal. Silver’s industrial uses range from electronics, batteries, automobiles, dentistry, and photovoltaics among others. As such, nearly half of the annual worldwide demand for silver was from industrial uses over the past five years. In contrast, only 10%-15% of gold supply is used for industrial purposes. SILVER’S INDUSTRIAL DEMAND Photovoltaic demand particularly has been a major factor in recent years with the growing proliferation of solar power. Silver consumption in solar panel production grew 13% in 2021 and accounted for 22% of total industrial usage as per the Silver Institute. China is the global leader in solar-panel manufacturing accounting for 74% of the module capacity and 85% of the cell capacity in the world according to the IEA. With manufacturing in China remaining muted in the short term due to COVID surge and related lockdowns, photovoltaic production demand over the short term is unlikely to influence Silver prices. SILVER AS STORE OF VALUE Silver has underperformed relative to Gold and Platinum this year. Both Silver and Platinum have outperformed over the past month and 3-month periods. Precious metals investments face strong headwinds as investors find relative safety in elevated US Treasury Yields. Although expectations are for the Federal Reserve to ease its rate hiking cycle going forward, that policy pivot remains unlikely anytime soon. SILVER SUPPLY AND DEMAND BACKDROP Fuelled by Silver’s price rally in 2020, supply rebounded in 2021 increasing 5% YoY. However, silver supply plunged into a deficit in 2021. This deficit was expected to widen further this year according to the Silver Institute as demand rises (+5%/1030.3 million ounces) was expected to outpace supply (+3%/1,101.8 million ounces). However, macro backdrop of events this year, from rising inflation, COVID situation in China, to geopolitics, has adversely impacted the demand from the electronics industry leading to excess inventory. Additionally, reduced manufacturing production in China will also lead to lower demand for photovoltaic production. Falling demand, especially in the short term, will likely result in supply outpacing demand. SILVER TECHNICAL SIGNALS & A PEEK INTO SILVER COT REPORTS Silver prices rallied over the past two weeks breaching a resistance band ($20.5-$21.32) that has held since July. Following this rally, RSI moved into overbought territory at 72.18. Additionally, on the 200d and 10d moving average (MA) we see a golden crossover forming. However, if we take a longer short-term MA (20d) to look at the larger uptrend that began on 14th October, the Golden crossover is far from likely to occur. Moreover, the rally faced resistance at the 200d MA reaching a high of $22.38 which is 3.99% higher than the 200d MA on the day. The highest close was just 2.8% above the moving average on the day. Both these levels are within 2x standard deviation of the Implied Volatility of At the Money Options (31.01%) as seen on CME's QuikVol. Nevertheless, the current rally does deliver promise as it confidently breached R1 of the pivot point indicator. This level of $20.95 now indicates a support level for the rally. CME’s Commitment of Traders (COT) tools shows that despite the price increase over the past month, producers have increased the number of short positions from 20.7% to 24.3% on November 15th. Managed money shorts have decreased from 32.4% to 17.7% while managed money longs have increased marginally from 26.7% to 28.2%. SHORT SILVER FUTURES TRADE SETUP CME Micro Silver Futures provide exposure to 1,000 Troy Ounces of Silver with a maintenance margin of $1,700 as of November 22nd. This provides a cost-effective way to get exposure to movements in Silver’s price. Establishing a short position with an entry price at $21.18/oz with a potential target at $19.88/oz (1x standard deviation of IV of ATM option above the pivot point) by Dec 16th (two days after the next Fed meeting) could provide exposure to a short-term correction in the price of silver yielding 76.47% returns or $1,300. A stop loss at 1x standard deviation of IV of ATM option above 200d MA at $21.88 would protect against an unexpected rally resulting in loss of $700 or -41.18% providing a reward to risk ratio of 1.86. Alternatively, holding the position until the pivot point would lead to 98.82% returns or $1,680. As the correction is expected to be in the short-term, December futures could provide superior liquidity. CME’s full-size Silver futures provide exposure to 5,000 Troy Ounces of Silver with a maintenance margin of $8,500 and improved liquidity in case of larger positions. MARKET DATA CME Real-time Market Data help identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. This material has been published for general education and circulation only. It does not offer or solicit to buy or sell and does not address specific investment or risk management objectives, financial situation, or particular needs of any person. Advice should be sought from a financial advisor regarding the suitability of any investment or risk management product before investing or adopting any investment or hedging strategies. Past performance is not indicative of the future performance. All examples used in this workshop are hypothetical and are used for explanation purposes only. Contents in this material is not investment advice and/or may or may not be the results of actual market experience. Mint Finance does not endorse or shall not be liable for the content of information provided by third parties. Use of and/or reliance on such information is entirely at the reader’s own risk. These materials are not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject Mint Finance to any registration or licensing requirement.
COMEX:SI1!Short
by mintdotfinance
1
Silver chart overviewDuring the Asian trading session, the price of silver solidified support at the $23.20 level and launched a new bullish impulse to the $23.50 level. We now see a downside pullback and could revisit this morning's support level. If the pressure on the lower support level increases, a breakout of the price below is inevitable. The price would then drop down to the $23.00 level. To continue the bearish option, we need a negative consolidation. Potential lower targets are the $22.80 and $22.60 levels. For a bullish option, we need a positive consolidation and a break above the $23.60 level. Then it is necessary to maintain up there and start further recovery with a new bullish impulse. Potential higher targets are the $23.80 and $24.00 levels.
COMEX:SI1!
by Financebroker
Silver Breaking Out (upward). Gold/Platinum should followGold/Silver bugs - are you ready for what a lot of us have been saying for the past 5+ years. The base/bottom in metals back in 2015 was the critical base for the next big move. This upward price swing should be the next accumulation phase which will drive a speculative phase in about 3~4+ years. That speculative phase will be MASSIVE (should happen near 2027~2029). You gotta love when the world sits and waits for metals to move - then ignores the 40% rally in metals/miners in the early phase - right? Here we go.
COMEX:SI1!Long
by BradMatheny
Gold Silver12. 4. 22 It looks like gold and silver are going to trade higher, but there's a chance is that they could correct the little lower first, and I believe a lot of this Might be related to how the dollar moves. I think the relationshipOf the two index markets did I talked about today versus the metals markets I talked About today...Has some irony to it because the indexes have been and have a correction higher, and I would think that they should trade lower, whereas the currency markets were trading lower and now have a bullish swing movie Higher... and I think they should go higher. It's almost like a paradox: Both groups trending lower, and both groups finding a foolish wing, but I'm looking at one group trading higher and the other trading lower. I'm not bringing this up to be clever. I am always concerned when I have a conviction that a market should go in one direction, and then I feel blindsided when the market actually does the exact opposite of what I expect I know this can happen, even with the best intentions, but I really want to avoid it to the best of my ability, and my way of dealing with this is to try to think as best as I can about what both the buyers and the sellers are thinking before I place my trade.
COMEX:SI1!
by ScottBogatin
Silver is up 32% from Sept 1 - Ready for the next move higher?Have you been following my research, weekly videos, and Custom Metals Indexes? If so, you already know why I've been telling traders/investors Gold/Silver are setting up just like 2003-04: building a momentum base over the past 24+ months. The next move higher (over the next 5+ years) should be incredible. Silver is up 32% over the past 90 days. Can you imagine what the next 500+ days will look like? Remember what happened to Silver between 2007~2011? Imagine that, but with a potential amplitude of 2x or 3x. Get ready, it's all just getting started right now. Follow my research. Learn why you need to prepare for the biggest opportunities of your life with my research/algos.
COMEX:SI1!Long
by BradMatheny
Silver chart overviewToday's silver price high is at the $21.40 level. We can say that we see the formation of a new lower high, and if we fail to move above the $21.40 level, we could see a bigger pullback in the price of silver. For a bearish option, we need a negative consolidation and a price drop to the $21.00 level. Increased pressure at that level could lead to a breakout below, and we could find ourselves again at yesterday's low at the $20.85 level. Failure to hold above would extend the bearish option. Potential lower targets are the $20.80 and $20.60 levels. For a bullish option, we need a positive consolidation and a move above the $21.40 level. Then we need to stay above and continue the recovery with a new bullish impulse. Potential higher targets are the $21.60 and $21.80 levels.
COMEX:SI1!Short
by Financebroker
Silver Futures Targting 19.90 TestTechnical & Trade View Silver Futures Trade View Bias: Bullish Above Bearish below 19.90 Technicals Primary resistance is 21.65 watch for bearish reversal patterns here Primary pattern objective is 19.90 Acceptance below 20.50 next pattern confirmation Acceptance above 21.70 opens a test of 22.10 20 Day VWAP bearish , 5 Day VWAP bullish Options Expiries for today’s New York cut N/A Institutional Insights Analysts at Bank of America note ‘The silver market has rebalanced on production discipline and demand from new applications including solar panels. Industrial demand to keep facing headwinds as the global economy lows, but demand from solar and EV to be supportive. If more spending on solar panels come through, silver should rally above $31/o
COMEX:SI1!
by Tickmill
Silver chart overviewOn Friday, the price of silver tried to start a new bullish trend, but it only managed to reach the $21.30 level. After that, we see a new bearish consolidation forming a new lower low at the $20.60 level. Now we are trying to hold on there to stop further decline in the price of silver. For a bearish option, we need passive consolidation and a breakout below today's support. Then we need to hold down there, and after that, we would see a further decline in price to the next support zone. Potential lower targets are the $20.40 and $20.00 levels. For a bullish option, we need a new positive consolidation and a return to the previous high at the $21.30 level. Staying above would help us form a new higher low from which we would start to new recovery. Potential higher targets are the $21.40 and $21.60 levels.
COMEX:SI1!Short
by Financebroker
Silver Levels & Strategy for next few daysDear traders, I have identified chart levels based on my analysis, major support & resistance levels. Please note that I am not a SEBI registered member. Information shared by me here for educational purpose only. Please don’t trust me or anyone for trading/investment purpose as it may lead to financial losses. Focus on learning, how to fish, trust on your own trading skills and please do consult your financial advisor before trading. Sagar Bhai, Silver had an excellent run in last 1 month from below 55K level to 63K plus level. Silver has made LH-Lower High pattern on chart, trading below VWAP. Showing sign of tiredness after decent up move. Silver is likely to consolidate or correct from this level. This is a good time to book profit. 59000 to 60000 should be good range to enter in long position for few months. We are likely to get a chance near next US FED hike when US Dollar Index will get stronger. Please review & share your thoughts as well.
MCX:SILVER1!
by manishmgupta
1
Silver chart overviewSilver chart analysis The price of silver formed a new higher high at the $22.20 level. Today, the price broke above the $22.00 level, but the price did not stay there for long, and a pullback to the $21.90 level followed. We are back below $22.00, which could put some pressure on the price. We need a negative consolidation and a drop below the $21.80 level for the bearish option first. After that, the price would enter the previous consolidation zone of $21.40-$21.60. A drop below would lead to a retest of the previous low at the $21.20 level. And a further drop would bring us down to the $21.00 level. At this level, the price could find more specific support and start a new recovery. For a bullish option, we need positive consolidation and a return to the $22.20 level. Then we need the price to break above and stay up. With the next impulse, we could see a further rise in the price of silver. Potential higher targets are the $22.40 and $22.60 levels.
COMEX:SI1!
by Financebroker