Silver Prices Rocket to 13-Year Highs. More Upside Is Likely.

Globe and Mail

a day ago

July Comex silver futures (SIN25) Thursday hit a 13-year high above $36.00 an ounce.
This surge has been brewing all week. On Monday, we saw a strongly bullish upside technical price 'breakout' from a choppy and sideways trading range on the daily bar chart. Silver prices paused Tuesday and Wednesday, but on Thursday picked back up to hit a 13-year high.
Still more upside is likely for the silver market in the near term after prices pushed well above strong technical resistance at the late-March high of $35.80 in July futures on Thursday.
Don't be surprised to see silver prices challenge $40.00 an ounce in the near term. The record high in nearby Comex silver futures is $50.36, scored in January 1980. Since gold (GCM25) scored a new record high of $3,485.60 an ounce, basis nearby Comex futures, in April, I have maintained, and still do, that silver appears to be a value-buying opportunity, as it's still around $15.00 below its record high scored 45 years ago.
Indeed, right now, it's 'Katie bar the door' to the upside for silver prices. It would take a close below chart support at $33.00 to rattle the silver bulls' cage and begin to suggest that a near-term market top is in place.
The gold market has also turned more technically bullish recently, posting a strong rebound from the May low, restarting a price uptrend on the daily bar chart and on Thursday hitting a four-week high of $3,427.70, basis August futures. The gold market has stiff overhead technical resistance to overcome for prices to push to new record highs. Those chart resistance levels are the May high of $3,477.30 and the contract high of $3,539.30, basis August Comex futures.
Fundamentally, safe-haven demand continues to flow into the gold and silver markets.
The U.S.-China trade war shows no solid signs of ending anytime soon, despite news today that U.S. President Donald Trump and Chinese President Xi Jinping held a telephone call. Early reports say the talks did not yield much of substance. The Russia-Ukraine war has heated up with this week's Ukrainian drone attacks on Russia's infrastructure. The Middle East is always a wild card for the marketplace.
What's Driving Silver Prices to 13-Year Highs?
Part of the buying interest in gold, silver, and platinum (PLN25) comes amid the recent news on rare-earth metals regarding China's export restrictions, which are causing disruptions in global supply chains. In turn, these disruptions are reducing rare metal supplies coming to industries like automobile manufacturing. China knows that withholding its rare earth minerals from the West gives it an advantage on the world stage.
The U.S. Dollar Index ($DXY) Thursday slumped to a six-week low following some downbeat U.S. economic data released this week. The down-trending USDX is a bullish 'outside-market' element for the gold and silver markets. U.S. Treasury yields have also backed down a bit recently, also a positive for the precious metals. The other key outside market for precious metals is crude oil (CLN25), which has rallied well off the April and May lows and on Thursday was poised to close at a two-month high, basis Nymex futures. Rising crude oil prices tend to be a tide that lifts most raw commodities.
Meantime, platinum futures have just hit a three-plus-year high of $1,152.50 an ounce, basis nearby futures. The next upside target for the energized platinum bulls is the March 2022 high of $1,197.00. Above that lies technical resistance at the May 2021 high of $1,281.40 and then at the February 2021 high of $1,348.20. The record high in nearby platinum futures was scored in March 2008, at $2,308.80.
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