Silver rose past double of the price and then stopped. The precious metal may show a bearish reversal at the end of November. At the turn of the year, buying silver has yielded profits for investors in recent years.
The precious metal has been the most volatile from 2011 to 2020. Current contracts traded in the $18,175 range. Closing above $19.54 on December 31 would result in a bullish reversal on the yearly chart, which is a very promising form of cash for cash bull.
The precious metal ended in 2019 at $17.90. In March 2020, the price fell to its lowest level since 2009, trading at $11.74 in a risk-free environment due to the global pandemic. Four months later, the silver market lowered its tech resistance level to its July 2016 high of $21,095, targeting $29,915 in early August.
Silver has reached its highest price since February 2013. The 11-year position hit a 7-year high in volatile financial markets. The metal must survive a bearish threat by the end of November before it starts bullish at the end of this year. Silver peaked in August and consolidated over $24 per ounce at the end of last week.
SILJ is a diversified junior silver mining product
Silver commonly experiences seasonal weakness at the end of every year. In recent years, purchasing silver in the last week of the year has led to the generation of revenue early the next year. The precious metal stocks tend to increase their price measure in the silver market. Junior mining stocks have more leverage than larger stocks when looking at metals. Prime Junior Silver Miners EFTMG ETF (SILJ) products include a portfolio of emerging silver mining companies. If the precious metal is gearing up again for growth in 2021, now may be the perfect time to buy a shrinking SILJ before the end of 2020.
Silver stalls after rising by more than 200%
Within five months, cash rose nearly 155% from $11.74 per ounce to $29,915 per ounce from mid-March to early August 2020. Silver’s weekly chart hasn’t been bearish despite a $5.69/ounce drop since August 3. After adjusting to at least $21.96 at the end of September, Silver hit highs and lows on the weekly charts.
The total number of open trade, long and short positions rises from 153,294 on September 25 to 164,968 on November 20. When prices rise, an increase in open trades is usually a technical confirmation that the future market would show a bullish trend. Meanwhile, the price moment indicator on November 20 was slightly below neutral, and the relative strength indicator was neutral. The 48.51% historical weekly volatility was slightly above the 2020 midpoint.
The potential for a bearish reversal at the end of November
Buying silver at the end of the year has been profitable over the past years. In three out of the past four years, purchasing silver in December has resulted in profits gains the following year. Any market participant who purchases silver at the closing price since 2015 has benefited. The biggest of these gains occurred in 2020.
As the year 2020 is coming to an end, the situation for silver and gold prices is still optimistic. The dollar index has shown a bearish move starting from March 2020. For both precious metals, the dollar decline tends to lead to a rise in price. Interest rates have remained at historically low levels, and the central bank is increasing the liquidity of the global financial system, which is contributing to falling currency values and rising silver and gold prices.
The tide of the government in 2020 is just a prelude to additional programs come 2021. The second wave of global pandemics continues to disrupt the economy. Central banks and governments continue to increase the money supply to increase inflation. Inflation has been gold and silver’s best friends in history. The reality is that the current situation cannot be more bullish about the price of silver in the months and years to come.
Mining shares are great ways to trade the silver market using a leveraged position. Junior silver mines may be the most promising leveraged trading approach you can make to non-leveraged products. The most direct way to invest in money is through bars and coins offered by retailers and financial institutions around the world. But money is a bulky commodity.
Many factors point to higher silver prices after 2021. Falling prices at the end of this year may be the perfect time to buy precious metals longer. SILJ excelled in the metals sector in 2020, but it has maintained the pace during the price correction. We propose buying SILJ at weaker prices, and we’ll leave plenty of room to add if the price corrections simulate the March experience, when the currency fell to its lowest level since 2009.