In our silver forecast, we look at the drastic rally during the session on Thursday, as we are clearly above the $18 level. With this, I now believe that the market will find plenty of buyers, and the fact that we are closing at the top of the range is in fact a very strong sign.
While there is a lot of concern out there, quite often precious metals will appreciate in value. Silver has lead the way, as we have broken above a significant resistance barrier in the form of the aforementioned $18 level.
Ironically, gold hasn’t done much the last couple of days but these 2 markets do tend to follow each other. With that being the case, I believe that it’s only a matter of time before gold markets rally as well. In general, a very positive on hard currencies such as silver and gold, as I believe that all of the uncertainty will continue to drive demand higher.
After all, the euro and the pound are both currencies and have a lot of problems, mainly because of the UK voting to leave the European Union. People simply do not trust them. However, the US dollar is strengthening only out of fear, and not out of fundamental reasoning. In other words, people are looking for an alternative.
Silver forecast: our target
At this point in time, I forecast that the silver markets will continue to find buyers in the dips that will be thought of as “value.” I will buy those dips, and the fact that we close the very top of the range for the session on Thursday suggests that there is going to be some follow-through. I think eventually we will reach towards the $19 handle, and then the $20 level.
I don’t really have a scenario in which I'm willing to sell this market, because quite frankly I think the $18 level will work as a floor. (I would also suggest that perhaps the support extends down to the $17.60 level, as it is a “zone” and not a line.) With this, I believe that silver continues to strengthen over the longer term, and that it is one of the better trades right now.