About Technical Analysis Behind Gold And Silver’s Recent Surges

The iShares Silver Trust (SLV) is one of the exchange-traded funds (ETF) that is tracking the price performance of the underlying holdings in the London Silver Fix Price. However, SLV stock at https://www.webull.com/quote/nysearca-slv sells silver from time to time to cover its operating expenses. SLV is an efficient and convenient trading vehicle. It mimics silver’s spot price, yet investors do not need to deal with exchanges that facilitate futures are contracting and do not have to pay prices over the spot to procure the physical asset. Besides, SLV has very attractive options that can be traded with great ease. Gold and silver are having both been surging recently perhaps for different reasons. The COVID is inspired by lockdowns increased deflationary pressures on world economies.

Gold Technical Analysis

  • Gold’s price is a breakout from $1,580 in April that is the more obvious of the two monetary metals, exhibiting a bullish flag pattern dating back to the beginning of April.
  • The low in gold’s price coincides with the introduction in the States of the coronavirus lockdowns in March. This began the flag pattern that lasted until mid-May when gold finally got up and started to run.
  • Gold has appeared to find a new base at that level. Gold continues up over $15 on the day, at the time of this writing on May 19th.

Silver Technical Analysis

  • Precious metals investors know well that silver bull markets typically follow gold ones. Silver chose to break formation and test lows in the $14 range while gold soared.
  • Well, finally, silver investors are beginning to feel the love again with the latest jump back into the mid-$17 price range. Silver head faked to $19 last summer and then proceeded to range trade before diving down to the $11.50 per ounce range in Q1 of 2020.

Final Analysis

  • Silver investors are having a right to be wary of holding the metal for any length of time and expect volatility in the price stemming from both industrial demand and the increased potential for financial market chaos.
  • The gold to silver ratio is peaked at 114 in April of this year, as shown in the MacroTrends chart above. It is one of the mean reversions of this ratio point to a potential bottom of about 20 to 1.
  • This is with a massive gold bull market going on amidst trillions of debt leverage that keeps growing around the world as deflation sets in.

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