WATCH OUT If Silver Breaks Through This Threshold Next Week

The huge Silver Rally this week took a lot of precious metals investors by surprise.  The silver price surged 15% since the BREXIT vote results last Friday.  Silver began trading at $17.25 last Friday and closed at $19.76 today.  Gold also performed very well by increasing 7%.

Precious-Metals-Spot-Price-070116

As we can see from the Kitco table above, silver had its best day in several years by jumping $1.06 as of the close this Friday.

Watch Out If Silver Breaks This Threshold Line

What is interesting about this present silver rally is shown the the chart below:

Silver-20-Year-Chart-070116

From 1996 to 2004, the price of silver traded below its 200 MA (RED LINE).  Once it jumped above it in 2004, it never fell below it except for the brief time it bounced off it at the end of 2015.  While I don’t pay a lot of attention to Technical Analysis, a lot of traders do.

What is important to notice in the chart is the 50 MA (BLUE LINE).  Once the silver price fell below the 50 MA at the beginning of 2013, it continued to decline over the next three years.  However, as the price of gold and silver started to rise in the beginning of 2016 and surge even higher after the BREXIT vote last week, silver is only $0.75 away from breaking through the 50 MA (BLUE LINE).

Once silver breaks above this 50 MA Threshold, I believe we are going to see a great deal more hedge fund and traders move into the silver market.  We may see the banks try and hold silver from crossing this trend-line, but if silver does close above $20.50 next week and continue higher… this could spell real trouble for the bullion banks who hold a great deal of silver short contracts.

Precious metal investors who were hoping for lower gold and silver prices to purchase more metal were caught by surprise as the silver jumped 15% in a week.  Those who have NOT YET BOUGHT METAL, you may be paying a lot more of the price of silver really starts to take off over the next several weeks.  I heard that several precious metals dealers said, “They had never seen anything like the kind of sales they were experiencing today.”

I will be putting out a very interesting article on the silver market next week that provides data showing how undervalued silver is compared to gold.

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68 Comments on "WATCH OUT If Silver Breaks Through This Threshold Next Week"

  1. Still expecting a huge run up in Premiums on Minted Silver coins….. Call me crazy but thinking it’ll exceed spot price by Labor Day…..and have been saying so since the end of January….

  2. Buford Pusser | July 1, 2016 at 6:52 pm |

    was nice to watch the climb, but still not time to count those silver chickens just yet

    • banker fats | July 1, 2016 at 9:35 pm |

      Seasonal lows will kick in soon and create a good buying opportunity into the elections.

      • Why?
        This seems to be a different with brexit anxiety, post brexit political questions in the UK, Trump vs Hillary here and possible impacts on trade, central bank continued low rates, etc. It almost seems a perfect storm, but then again, i typically try to focus on how people are thinking or are panicked. I sense growing panic.

  3. Petedivine | July 1, 2016 at 6:59 pm |

    I would not be surprised to see a large increase In Asian buyers of Silver and Gold on Sunday. The Asian gamblers will smell blood and increase their fund flows pushing for chaos and an explosion in price higher. Asians love this sort of setup, and once the price moves up they will stampede into the market demanding physical and mining stocks.

    Thanks for the great insight.

    • banker fats | July 1, 2016 at 9:36 pm |

      Agreed. Look what they did to bitcoin.

    • Hope your correct. Enjoy the holiday.

    • MrThistle999 | July 2, 2016 at 5:49 am |

      I live in Asia, and yesterday’s rally started here, while New York was still sleeping. I look for that sort of action to happen more often. I keep hearing about how much financial trouble China is in, but I’ve been hearing the same about the West for years. I think the Chinese have a LOT of cash, and gold and silver might be the perfect place to spend some of it.

      • rwmctrofholz | July 2, 2016 at 8:39 am |

        I’ve been seeing signs of this too over the last few weeks. Seems like in the past, metals would sell off over night and then get crushed at the open of the US Markets. Recently, however, I’m seeing the metals creep up over night in anticipation of a jolt up at the open of the US markets.

      • David Chan | July 4, 2016 at 4:21 am |

        I live in Hong Kong. Today afternoon, I went to Kitco HK office in Central to purchase more silver coins and bars. It was phenomenal. There were a lot of customers awaiting their turns to pay cash for their metals. Staff members told me they had been too busy for a simple lunch. Clients were buying sizeable quantities. I happened to talk to one of those patiently waiting. He, a middle-aged Chinese gentleman, said that he has learnt a lot about gold and silver through YouTube channel. I have never seen such a situation as people are scrambling for the PMs.

        • Petedivine | July 4, 2016 at 6:14 am |

          Thanks for letting us know what’s happening in HK. Do you think mainland China has similar buying activity?

  4. Don;t be surprised if there is a huge smack down Sunday/Monday as usual on a thin 3 day week end Monday, Hope I’m wrong but kinda has happened before,

  5. They deserve the consequences if they are not going to enforce naked shorting laws.

    • MrThistle999 | July 2, 2016 at 9:01 pm |

      With due respect: Huh? What consequences, senor? We don need no steenkin consequences, cabron!

  6. Time to hike silver margin requirements to stall the rally.

    • Has anyone actually read anything about the CME Group increasing margins on silver futures? I also expect them to do so by Sunday or Monday, but am uncertain about the potential impact.

      I remember the merciless increases (five within a week, if I recall) they imposed in 2011, where silver dropped $6 in a single day. Now, I have read that margin increases work with equal effect on both long and short contract holders, but my actual experience has been that it always punishes to the downside.

      Supposedly, the margin increases will affect those who are most leveraged as I understand it. With open interest at record levels and commercials holding record short contracts, one might think margin increases would actually take the ceiling off prices. This, of course, ignores the thought that the bullion banks have unfettered access to freshly printed cash courtesy of the Fed, which would render margin increases meaningless for the shorts.

      If the former is true and the CME group is in on the suppression as many of us believe, they might forego margin increases altogether…which in and of itself would be a tell.

      What do you guys think, and what are you expecting?

      • Petedivine | July 4, 2016 at 3:27 pm |

        The SGE didn’t exist at that time. Things are different now. They’d just lose the ability to price PMs if they started handicapping market players.

  7. silverfreaky | July 2, 2016 at 1:16 am |

    It seems that the number of comments here is direct proportional to the silver price.I like that.
    Thats what we need.The bull herde must be awakened.

    When you can read that chinese housewifes buy silver we have the stuff for lift up the price very soon.

    Yesterday i had my biggest miner stock win and that with a relative weak gold price in compare to the silver price.
    Maybe gold is near to a range where the building of a new mill or the overtakes are in sight.When this point is reached the right Juniorminer and explorer will make you rich.Especially this one with a good financing and low costs.

    AETERNA ZENTARIS INC. 13,19
    BAYHORSE SILVER INC. 21,59
    ENDEAVOUR MINING CORPORATION 2,95
    ENDEAVOUR SILVER CORP 1,27
    EXCELSIOR MINING CORP -1,21
    FISSION URANIUM CO 0,65
    GEOLOGIX EXPLORATIONS INC. 16,67
    PEREGRINE DIAMONDS LTD. 79,44
    PRETIUM RESOURCES INC. 2,41
    SANDSPRING RESOURCES LTD. 8,96
    SILVER BEAR RESOURCES INC. 23,16
    SPANISH MOUNTAIN GOLD LTD. 7,73
    TAHOE RESOURCES INC. 2,97
    WELLGREEN PLATINUM LTD. 8,14

    No recommandation.

    Look to Silver Bear Resources.From the low now a ten bagger.I don’t bought them at the bottom.

  8. Joe Lindell | July 2, 2016 at 6:42 am |

    I see silver spot rose 7% on Friday. WHY? What is silver spot rising? The premiums and delivery
    times are about the same. It isn’t oil. The dollar is still strong. It isn’t the debt. Is it all Brexit? Silver
    rose more than gold, percentage wise. WHY? WHY? WHY?

    • Joe Lindell,

      I believe the Bankers allowed silver to rise 7% on Friday just to piss you off. Did it work? 🙂

      steve

      • Maybe a bull trap. This kind of leverage compared with gold is very low occurence imo.
        After a 10% drop in silver would not necessarly the belief by some on a new bull market since the late 2015.

        • RD,

          I imagine you are going to BELLY-ACHE all the way as silver heads over $100.

          You and Joe Lindell are like two peas in a pod.

          Steve

          • When reading again my post, I realize it was not very clear.
            What I wanted to say is that such rise 10% for less than 2% for gold is strange.
            There could be a 10% correction which would not be surprising and which not stop this potential bull market since late 2015.
            The best short term scenario would be a rise to around 21.5 to consolidate to around 20.
            100 USD/oz, perfect for me !

  9. austin ragz | July 2, 2016 at 7:43 am |

    RSI at 84.23 in overbought territory. Intra day tested highs and came back on the candle and ended higher.
    How is it that EVERY article you write is always bullish?? It has run for now. Will recede and then run again. Why do you folks give stupid advice?

    • austin ragz,

      The overwhelming majority of articles I write are for the MID-LONG TERM. Yes, I am bullish on the mid to long term. However, this short term trend line is important if taken out by traders.

      Lastly, while the daily RSI is overbought at 83, the monthly chart shows an RSI of 57 and a weekly Chart RSI of 73.

      I believe the situation is different since the BREXIT vote. Things could get out of hand especially now that 22 Banks have all decided AT THE SAME TIME to increased Stock buy backs and increase dividends.

      steve

      • austin ragz | July 2, 2016 at 6:43 pm |

        Thanks for the reply man. After Mike Maloney, Jim Rickards and all I am bull for long term too. Just seen toooo many gyrations. In todays case even stochastic indicators are in overbought territory. I will wager a 10$ that there is going to be a correction pretty soon. It might touch the 20$ mark breifly but I bet its set o its high point for now.
        Always saying its gonna rise rise rise watch, if it falls its manipulation, it rises then breaking the banksters does not help. Just saying and I am with you for the long term.

  10. Petedivine | July 2, 2016 at 8:29 am |

    I was wondering why TPTB permitted the price of silver to increase. Could it be that they are being clobbered by entities taking advantage of the arbitrage between the physical markets in China and the paper markets in the west? If they keep the price low they lose their PMs. Better to let the price rise and keep the metal that would have moved East. The introduction of the Shanghai Gold exchange may have broken the manipulators backs.

    • rwmctrofholz | July 2, 2016 at 8:44 am |

      That’s an interesting thought. I’ve seen the spread in silver between London and China get up to as much as 3%. I’d be interested in knowing what, in general, it would cost to ship the physical to China (or from) to know if the arbitraging is worth it.

      • petedivine | July 2, 2016 at 4:17 pm |

        If the entity you are delivering too has a vault in the U.S. then there wouldn’t be an additional cost.

        Example: I own bitgold as a hedge against a banking crises. There are vaults in the U.S., Canada, Singapore, Hongkong, and a couple of other places. I can buy gold in the U.S. and have the metal stored in any of the foreign vaults. I wonder if there is a similar mechanism for larger arbitrage players to deliver into a U.S. based vault and have it registered for pickup in a Chinese vault via a company with vaulting services in both nations similar to the GoldMoney vaulting system.

  11. Well, with Daily RSI currently at over 77, and Weekly RSI at 73.88, Silver is sure due for a correction!
    The previous run up, that took Silver from its $13.62 Low to $17.99 on May 2 resulted in a stunning Daily RSI of 81.99.
    A (Fibo) 50% retracement then occurred, that took prices back to the $15.93 interim Low on June 1.

    Silver prices *may* try & exceed the current $19.75 price, but it is very doubtful that the next resistance (at $21.54, from the July 10, 2014 interim Top) could be reached this time.

    Possible Fibonacci retracements from July 1 Top levels are:
    – $17.48 (38.2%, unlikely despite an Andrew’s Pitchfork next target line close to that level)
    – $16.75 (50%)
    – $16.00 (61.8%)
    Without going into too many details, this last level is a quite probable retracement, as Silver has/will finish an (Elliott Waves) “Wave 1” move, that will be followed by a “Wave 2” correction (very often showing 62% retracement of the first Wave).

    That correction/retracement will take the RSI back down to much lower levels…
    Before the next move Up… for the “Wave 3”, «the mother of all waves», which statistically accounts for 1.8+ times the amplitude of “Wave 1” (a $6.24+ move Up) that could possibly take out the next 3 resistances Up, over $23.06 🙂

    • Please can you tell us what is your major wave counts (in term of timing) regarding silver ?
      Thanks.

      • Sorry, RD: I couldn’t help you on timing.

        • By timing I meant, for you are we still on the first wave on a 5 waves structure ?
          If so, how do you know from the EW theory whether the wave 1 is over at this level ?

          Or are you taking into consideration the bigger picture from 2001 ?

          • RD,
            Sorry for the delay in replying.

            Yes, I think Silver is still in the first Wave of a 5 waves (impulsion) structure:
            Either at the end of it (in a I-5-v sub-waves count), or (more probably)
            currently at the end of I-5-iii.

            One can’t really know when a First wave is over, as it does not have much to compare with.

            However, if you look at a Daily chart, from the Dec 15, 2015 Bottom, you can count (sub) wave I-1 (Feb 11, with an interim Top at 15.92).

            Followed by a (sub) wave I-2 (in a,b,c pattern, as it must be) ended on Feb 26-29.

            Wave I-3 started on February 29, and ended with the interim Top at 17.93 on April 29.

            Wave I-4 started on May 2, itself in 3 sub waves, down to $15.81 on June 1.

            Wave I-5 started on June 2.

            It remains to be seen if I-5, that will complete wave I is done yet.

            In which case the count of its own 5 sub-waves would be :
            I-5-i to 16.51 on June 6
            I-5-ii to 16.22 on June 7
            I-5-iii to 17.84 on June 16
            I-5-iv to 17.10 on June 22
            I-5-v (Final) with extension (as I-5-v higher than I-5-iii) to the 19.87 Top
            or
            if the (alternate/possible) count is rather:
            I-5-i to 17.84 on June 16
            I-5-ii to 17.1 on June 22 (minor correction)
            I-5-iii (probably over now)
            That would be followed by
            I-5-iv (more brutal that I-5-ii, possibly back to the 18.47/18.44 level, as the I-5-ii correction was pretty mild).
            and a (final) I-5-v that would need a lot of juice in order to take out the 21.54 resistance (from July 6, 2014 interim Top)

            Of course wave I will be followed by a II wave (38 to 62% correction of I).

            But thereafter will come wave III that will make PM Bulls like me very happy 🙂

        • OK thank you very much Patrick !
          It confirms other TA which means correction from now (20- level) or from 22- level.
          I note that the first scenario seems to be the most probable.
          In this one, a correction to 18 at the minium or even 16 is the main target zone for the II phase.
          For the second possible count, it would give a 18/20 range.
          Am I correct ?
          Thanks.

  12. By Wednesday morning silver passed $18. By Thursday morning it passed $19. It closed Friday afternoon at $19.76. I think it would have hit $20 except for the afternoon close.

    I believe that either the Federal Reserve and the big banks are no longer able to suppress metals prices. Or they’re letting them go up. I think we’ll see silver hit $25 by next Friday.

    The UK might be the reason for the price explosion. The British pound is dropping in value at the same time that metals are going up.

  13. short term overbought and short term overhead resistance hit… small pull back is expected…

    26 by year end is quite possible now…. 35 by next summer…. possibly challenge 50 again next autumn…

    that’s how i see it play out…
    beyond 50, i see 4 digit silver …. lol

    • MrThistle999 | July 4, 2016 at 3:10 am |

      Dear jude – Tricky business giving strict time/prices like you’re doing here. I think the move to higher prices will be much more violent, for instance, it’ll be way above 26 by year end (which is six months from now, after all). Why? Because there’s just SO MUCH cash out there, world-wide, looking for a home. We’ll see…

  14. I am curious if any othe silver bears here that have a love affair for fiat currency noticed that the on-record Federal debt increased by roughly 98 billion from this past Wednesday to Thursday? Google debt to the penny and see for yourself.

    • Max Meister | July 4, 2016 at 11:38 pm |

      Yeah, who cares? People don’t pay attention to these facts. The game goes on until the day it won’t.

  15. Paper Silver | July 3, 2016 at 11:24 am |

    Found on GATA today … detailed info on paper Gold/Silver manipulation;

    http://www.uncommonwisdomdaily.com/reports/cfk/goldcoverup/

  16. OK Ladies and Gentlemen,
    Let’s see how much the cartel can not it down in the short run [when the COMEX opens for corruption I mean business after the July 4th holiday].

    • Globex has been opened for 90 minutes now, quite stable, asia should be opening very soon now.

  17. MrThistle999 | July 3, 2016 at 7:23 pm |

    Umm, yeah, silver up .84 now, @ 20.43, high 20.48. It will be VERY interesting, if silver continues to rally in Asia, to see what happens in New York after the holiday.

    • MrThistle999 | July 3, 2016 at 7:31 pm |

      Geesh! Just realized it’s up over 3 bucks in a little more than a week! I mean, I knew that… -) Still early here.

    • Petedivine | July 3, 2016 at 7:48 pm |

      The Chinese are the great investing horde of Asia with huge numbers of Dollars and Yuan looking for return on investment and they will not be denied. Siver is a miracle metal. At what point did we not see the two coming together? The boys on the other side of the trade are fudged. There will be no forgiveness from the Asians. Better be prepared to sell more office space in NY to cover the losses.

      • MrThistle999 | July 3, 2016 at 7:56 pm |

        Hey! Like your colorful style! I’m noticing on other forums that the term “pre-market” is getting used a lot. Seems like plenty of people think New York and London are still the only markets out there. But HELLO! Good Morning China! I’m pretty sure their money is real, too. (Fiat maybe, but considered real. :).)

  18. silverfreaky | July 4, 2016 at 3:22 am |

    What about trump?Is he your next president.I think so.

    • Vince Foster once said he chuckled when he saw the book, “Book of Money Making Schemes: How to Become Enormously Wealthy with Virtually No Effort” by Roderick Masters sitting on a young Hillary Clinton’s law office desk. I’ll bet he wouldn’t be chuckling now.

  19. Jason wece | July 4, 2016 at 8:52 am |

    I think the world will soon see how undervalued silver really was. The price is way low and I think we are finally seeing prices beginning to show the true value. I think it will shatter the new high by far in the near future.

    • MrThistle999 | July 4, 2016 at 9:04 am |

      Very likely about the true value. However, the silver price is still manipulated, but with massive buying and naked short covering, it may become too difficult for the banksters to control the price. Are we there yet? Very possibly yes!

      (BTW, not sure what you mean by “shatter the new high.” Do you mean “shatter the old high?”)

      • Jason wece | July 4, 2016 at 5:02 pm |

        Yes lol I believe it will go up even beyond what it hit in 08-09. I believe it could well go beyond the old highs and in a relatively short amount of time but I also agree that prices are so manipulated as I believe most of the financial and even political system is. Sorry I meant to say the old highs we have seen in past years.

  20. OutLookingIn | July 4, 2016 at 9:59 am |

    The latest COTS report puts the ‘commercials’ into record open interest territory, in both gold and silver futures. Since then they have added to their record high open interest amounts, in an ongoing attempt to cap the price. Its not working for them as it has done in the past.

    The CME along with some large brokerage houses, have raised margin requirements, the CME twice in one week. The global financial tide is fast receding, soon to expose all those who have been swimming naked. A panic to short cover is beginning. This will push silver and gold prices much higher at a quicker pace, while pulling the general markets down as liquidation takes place to cover exposed short positions.

    The sharks are circling as they smell blood in the water. MARGIN CALL. Time Please. All accounts to be settled at close of the business day. MARGIN CALL.

    • OutLookinin:

      Please explain to me how MARGIN CALLS could possibly hurt the goons, at an (unprecedented) time like now where interest rates are NEGATIVE !?

      “Margin Calls” have now in fact become another incentive for the banksters to short Gold & Silver down to the core of the earth !

      Although it has decreased substancially since January 2016, keep in mind that the banksters had the front to push the ratio of “paper gold” relative to “physical” up to 542 to 1…
      (See http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/01-overflow/comex%20gold%20coverage%20ratio.jpg)

      As in “there was only less than 1/500th ounce of physical Gold for each ounce in paper contract”!!

      With the SEC seemingly blind, and/or always busy looking at other things, and interest rates (not about to go higher anytime soon) as low as they are now, the “deterrance” of Margin Calls has now turned an INCENTIVE for naked shorters!!

      So, there is no doubt in my mind that Banksters aren’t done yet manipulating Precious Metal prices (among other things, of course…)

      However, in preparation for “the big one” (market/economy crash that will make 1929 look like a rainy day picnic, that is), and/or in preparation for COMEX Gold & Silver prices NOT being “the reference” anymore, I ALWAYS keep in mind the following, and I act accordingly:

      «Paper Gold is nothing but paper pretending to be Gold»

      … And the exact same of course applies to Silver.

      • OutLookingIn | July 4, 2016 at 11:07 am |

        An old street saying;l

        He who sells what isn’t hissin, gives it back or goes to prison.

        Negative overnight interest rates and contracting futures on margin – paying a set percent down and financing the remainder, have little effect when there is a margin call.

        I would be pleased indeed, if you could prove to me how margin calls have become an incentive? Especially when you buy something on credit, then sell it when its not yours!

  21. Well… It’s just math!
    If, for borrowing money from you, YOU will pay me a (so far small) amount, I will benefit from it.

    And, if with the money I borrowed from you at Minus 0.xx%, I (as a bankster) can finance covering naked shorts (that, with the volume, and fire power I can put on the market, prices WILL take prices down, and WILL generate huge undue profits. (as prices are currently referenced by the infamous COMEX), and my benefit will be twofold.

    Therefore, what used to be an “incentive” not to risk short covering risks & associated costs is now not *voided*, but in actual fact *reversed*, as the more I borrow at negative rates, the more money I’ll make, so it becomes en incentive to do immoral things.

    Is that too simple for you to understand?

    FYI, German “investors” currently have to PAY for leaving their money in German bonds!
    (http://www.nytimes.com/2016/06/15/business/dealbook/germany-bonds-negative-ecb.html?_r=0)

    FYI(2), Banksters are currently using negative rates for buying back their own stocks by the $ tens of billions.
    This will – obviously – result in their respective stock prices to go (totally artificially, of course) Up… to that the MORONS (public) who still hold stocks instead of PMs will buy these stocks… from the Banksters, which will end up for them with nothing but their own eyes to cry for their losses when the big crash will hit (probably this coming fall…)

    Not to mention the fact that Banksters always get better than anybody interest rates from… the Central Banks that they own & control themselves.

    I gather now you may start to get my point, and this pretty simple math…

  22. OutLookingIn | July 4, 2016 at 12:28 pm |

    Suggest you do more research into brokerage/trader practices.

    “Naked shorting” (selling what ins’t hissin) is still illegal, and when the trade goes against you (margin call) you must stand good for it, or go to prison. The interest rate you pay (or don’t pay) for your leverage is neither here nor there, when it comes to the futures contract settlement.

    Usually, if “it” sounds too good (simple) to be true, “it” usually is! Good luck with that.

  23. At what spot are all of you experts going to stop buying?

  24. Or put another way high high will you ride this? Are you adding a higher percentage of physical?
    Thanks

  25. Now the silver price is dropping like a stone

    • Paul,

      I would have been surprised if they didn’t attack the price. Like I said in the article, the bullion banks will DEFEND that 200 MA line. Please check out my article to come out shortly.

      steve

      • If the banks manipulate the price, how has the price been rising since the start of the year? If they issue paper contracts to suppress price – why not just issue enough paper infinitely to always keep it down?

        Can you explain?

        • Adrian,

          It isn’t a simple topic. Briefly there are limits to the effectiveness of the manipulation, and SOME physical has to be delivered, and inventories for delivery are going down.

          Second, the U.S and Western world led COMEX doesn’t exists in a vacuum. There is demand from other parts of the world, and there are other markets as well.

  26. James Randolph | July 6, 2016 at 12:06 am |

    As I post this, overseas markets have Silver prices as follows:
    Bid: $20.43
    Ask:$20.52

    It’s just when the USA markets open that Silver (and Gold) dip in price. I don’t find this surprising in the least.

    James

  27. $20.43us here in Australia, according to the Perth mint

Comments are closed.