Source: Clayton County Register
By: Lira Mercer
Date: Aug 29, 2023
Silver has stolen the spotlight this week as it experienced a significant gain of 6.8%, outpacing gold’s modest 1.3% increase. This comes as no surprise to those who have been paying attention to recent market trends.
In previous articles, we have emphasized the importance of not overlooking silver. It has long been touted as a valuable asset, and recent developments have only reinforced this notion. Technical indicators, such as Silver’s “Baby Blues” curling upward, suggest that silver may even be poised to lead gold in the market.
In just six trading days, silver’s price surged from its low of 22.265 to touch 24.430, a gain of 9.7%. This rapid increase in value presents lucrative opportunities for investors. For example, a single contract gain from buying at the low and selling at the high would equate to $10,825. Those with deeper pockets who bought 100 contracts would have seen a gain of $1,082,500 within the same period.
Visually comparing the performance of silver and gold over the past two weeks, it is clear that silver has been on an upward trajectory while gold has remained relatively flat. However, both precious metals are nearing a potential trend reversal. As silver approaches the point of flipping its trend from short to long, the question arises: how much higher can silver climb?
Looking at past trends, when silver has previously confirmed a long trend, the median maximum price gain has been 13.2%, with the average maximum gain being 19.6%. Applying these statistics, if silver’s trend were to flip long at 24.870, a match to the median max gain would bring it to 27.480, and the average max gain would take it to 29.040. Historical data also suggests that these long trends typically last for an average of 11 weeks.
While many traders may overlook these statistics, prudent traders understand the importance of considering both time and range in cash management. It is worth noting that numerous studies have shown that the majority of traders are not prudent in their decision-making.
Looking ahead, it is important to pay attention to the upcoming economic indicators that will be released next week. These metrics will likely have an impact on the market and can result in both losses and gains. Of particular significance is the release of the Fed-favored Core Personal Consumption Expenditures Index, which is expected to show an annualized pace of +2.4%. However, it is important to consider other factors that may suggest a different outcome.
In summary, silver has demonstrated its potential for significant gains while gold shows signs of gaining momentum. Investors should closely monitor the market and consider the possibilities presented by silver’s current trend. Prudent decision-making and attention to economic indicators will be key in navigating the ever-changing landscape of the market.