Gold Market Wire
News, analysis and commentary for gold traders and investors
Silver Market Update
Silver Powers to Next Level
May 18, 2021 - (Gold Market Wire) - Silver has taken on the mantle again, and is running hard. Yesterday/s close at $28.26, just over the cusp of our next horizontal resistance was classic bull market action: power and hold right into the close. Little wonder then, during the Asian morning, we've already seen $28.75. The market is on fire, no doubt.
And it's only Tuesday. It's not even time to talk about the weekly close.
Right now, the adjustment is to higher levels is so pronounced, one could be forgiven for thinking this is Bitcoin. But, of course, its a lot more solid than Bitcoin, and, no, it doesn't go up and down 5%-7% in a day. It is our view, here at GMW, that we are still in the early innings of a major re-valuation of Gold and Silver, so we are not tempted to talk about where it all "ends." Right now we see pretty clear sailing ahead, with lots of volatility. The key to trading such a market will be to have the nerve to buy on pullbacks, and the skepticism to shed some length on big rallies. The achilles heel will be the idea that swinging for the fences could lead to instant retirement. That, even in this environment, is a fool's errand. Silver, occasionally leveraged in minuscule amounts, should be treated like the nitro-glycerine that it is. Next up is our $30 target. It looks like a challenge that we will take on soon, and if we climb over it, there may be a wave of action from both directions, so scaling down the leverage and the position may be necessary. When we rest comfortably over $30, we can consider more size and re-applying the leverage. The trap, of course, is that, in approaching $30 we could get a sharp downdraft, but if we scale it down at that point and get the downdraft, we will be in an excellent position to add length again. If we simply climb over and settle in, we can buy at that juncture. Risk/Reward, as ever.
As we now head into a monetary crisis, proper, it compels us to understand the value of the physical realm of the Metals. This is a trading site, true, but we would be remiss if we didn't mention that a core position in physical is part of the portfolio posture. It is all well and good that our metals are rallying but one should take their comfort fairly cold. In the big picture, none of this is good news, for the world or for the individuals in it. The Metals are a survival mechanism, but as one of the greatest Gold traders we know has said in the past, if you really think it's going to be great to see Gold at $5,000 an ounce - you need your head examined.
A truer phrase has likely rarely been uttered in the world of Precious Metals.