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Silver Price Forecast: A Major Low Is Close

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By Christopher Aaron

Silver continues to wind and grind its way toward a major multi-year low. The chart pattern is increasingly clear for those with the proper perspective. Unfortunately, over the short-run, silver is doing what it tends to do best: frustrate the majority of investors into abandoning the sector, just at the wrong moment.

As in the other major lows which have occurred over the subsequent decade, many will be caught unprepared for the next wave of the advance when it occurs, due to the human tendency to only follow markets which are moving sharply higher. In reality, the best time to be following and investing in a market is when it is grinding into a support zone, so as to be positioned when the next wave manifests.

This is exactly where the silver market finds itself today.

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Silver Retesting 7-Year Base

The most important point to remember about the present silver cycle is that the precious metal is currently retesting a 7-year base breakout which occurred just over one year ago.

The slightly slanted 7-year base can be seen clearly on the long-term chart above (blue). Note the grinding-type of price action which featured many overlapping waves beginning in 2013 when silver fell below $24 per ounce. Lower? higher? lower? higher? and finally lower to the 2020 Coronavirus panic-induced bottom near $11 per ounce. These overlapping waves with little to no net change in price are classic characteristics of a long-term basing pattern in technical analysis.

Following the Coronavirus selloff, as inflation began to become the primary concern in the financial system, silver finally broke out of its 7-year base (red callout), by registering weekly closes above $18.60, the final downtrend resistance zone of the base (turquoise line).

The tremendous wave higher that followed the breakout took the precious metal to near $30 per ounce in August 2020, nearly a tripling the price in a little over five months.

Such an impulsive wave, with clear multi-year new highs, is a tell-tale sign of a new cycle underway.

Retest is a Process

Again, the point that investors need to remember now is that silver is currently retesting its 7-year base breakout. A retest is when a market comes back to a former resistance level, and challenges those buyers who caused the breakout to show up and buy again. In classical technical analysis, the rule is that broken resistance is expected to turn to support.

In this case, the zone near $18.60 is where former resistance is expected to see buyers reemerge on the retest.

The challenge in long-term chart analysis is that in extremely bullish markets, proper retests will not come fully back to their breakout points, before a market will embark upon its next wave higher. In this case, it is possible that the retest of silver?s 7-year base may only come back to $20 or $22. It is thus possible that the retest has already occurred, and that silver is in the process of now rounding upward into the next wave higher.

Again, in very bullish markets, retests will not come all the way back to their former breakout points.

However, in less bullish markets, retests will sometimes come all the way back or even slightly below their breakout points.

We cannot know for certain how far silver will need to come back to finalize its 7-year base retest. However, we can know that from the current price near $22 per ounce, we are much closer to a bottom for the retest process than we were last year when the price hit $30. If risk exists down to $18 - $20? but potential reward exists up to $50 (the former 1980 and 2011 all-time high), then from a risk to reward perspective silver is extremely attractive in the present price region.

The Proper Strategy for Silver Investors

The proper strategy for those who understand the big picture perspective of a long-term retest, yet with the uncertainty of the exact price point which will represent the final low, is to accumulate a portfolio of silver and silver-related investments into the current window. By dollar-cost averaging now and for perhaps the next 6 ? 18 months, silver investors can capture an excellent portfolio of value into the expected low, but without the worry of needing to try to time the exact bottom.

Remember: silver had had fallen by 78% from 2011 to 2020. The price of silver could not fall by 100%, so inherently much of the risk had already been taken out by early 2020.

In mid-2020, silver finally broke higher from its 7-year base in an impulsive inflationary advance. The market is now coming back into the zone of the former base in a classic retest. Former resistance is expected to act as support within the next 6 ? 18 months, and a new bull market should emerge as the world begins to grasp the ramifications of the inflationary policies following the Coronavirus for the last two years.

Silver investors should not be abandoning the sector now, but aggressively accumulating silver-related assets into the retest. Those who do so will be rewarded when the next up-leg of the new cycle begins. Unfortunately, those who think they will be able to time the bottom perfectly will likely be caught without sufficient holdings once the next powerful advance begins.

At www.iGoldAdvisor.com, we are preparing to purchase several silver-related investments amidst any final selling into the coming low. In addition to open market trades, we plan to make highly-leveraged investments via private placements, which offer investors free warrants in silver mining companies in addition to their shares.

The big picture must be remembered with silver at all times, and now more than ever: an extremely healthy base breakout retest is now underway.
 
It's hard to see a future for silver when Rostin Behnam of the Commodity Futures Trading Commission admits to "tamping" down the price.
But at least it keeps it down so stackers can buy more.
 
I normally just dollar cost average in regularly, but recently I have been buying a little less and saving some $ waiting to see if it goes down to 20-18 range, but realistically I don't have much money and that few dollar drop would only mean a couple of extra ounces. Maybe if I was spending 10's of thousands those few dollars would be more significant and make me think about it more, but on my meagre budget 1 or 2 dollars hardly matters.
After reading this I think I've decided that I'll just blow what I have now and keep up with my regular buys. It might not be the ultimate low atm, but shieet... it's close enough.
 
Back in March 2020 I was lucky enough to buy pretty much right at the bottom and before premiums went up! It was only 20oz but I was so happy with myself for that one.
 
Administrator said:
It's near impossible to pick the bottom (or top) of most markets. Better to dollar cost average.

I agree with this. It's a sensible strategy for the majority of people
 
When Silver was unloved in 2018, I used the average All In Sustaining Costs (AISC) of the miners to justify my bulk acquisition at the time. When you could buy silver at less than the cost of production, that was a no-brainer IMO. Similar to march 2020 before the increased premiums showed their ugly heads.

I think dollar cost averaging is a worthy strategy, but should be accompanied with a good understanding of the market and overall fundamentals.

I have silver reserved for many purposes, the most comforting of which is securing wealth outside of the banking system. I have silver stored for my kids inheritance when they turn 25. I have Silver stored as a superannuation fund for retirement. I have silver stored purely for speculative investment. Whatever the reason for me stacking silver, I find great comfort and security in knowing it's in a liquid, tangible asset, especially in such times like these. Especially knowing about bank bail-in laws and the overall fragility of this fiat monetary experiment.

Of all the things I could put my $$ into, PM's tick all the boxes for me. If I were looking solely for a shor-term capital investment, there's no way I'd choose physical silver. PM's are a calculated long-term roll of the dice and offer a level of security for my savings with unbelievable potential. If Silver made it's way into bubble territory, I would consider offloading/transferring a portion into other viable income-producing assets, providing the move made sense (cents).
 
shinymetal said:
I normally just dollar cost average in regularly, but recently I have been buying a little less and saving some $ waiting to see if it goes down to 20-18 range, but realistically I don't have much money and that few dollar drop would only mean a couple of extra ounces. Maybe if I was spending 10's of thousands those few dollars would be more significant and make me think about it more, but on my meagre budget 1 or 2 dollars hardly matters.
After reading this I think I've decided that I'll just blow what I have now and keep up with my regular buys. It might not be the ultimate low atm, but shieet... it's close enough.

I kind look back now thinking damn it, I should have saved my money for the dip, I knew it was coming. I've spent enough since then that even If I'd only spent half and saved half it would have been significant. Oh well, you live you learn.
This dip is a big one, it's crazy that inflation is going wild, everything is getting more expensive, but silver's getting cheaper. It's illogical, I think there were probably a lot of people sitting on the sidelines waiting for this right now. How much lower will it go? and will it go and how quickly will it bounce back?
 

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in SG there are competitions
$20 discount (promo) and -3% discount for selected products (limited time offer):
https://www.silverbullion.com.sg/Shop/Buy/Promo
https://sgd.indigopreciousmetals.com/bullion-products/silver/silver-bars/10-oz-heraeus-silver-cast-bar-9999-purity-w-coa-pre-order.html

As compared to 100 oz going for A$2,900 BN
BS selling 100 oz silver for S$2,850 to 2,900 they cater for taxed customers from UK
premiums are higher in US https://sdbullion.com/silver/silver-bars/100-oz-silver-bars

stronger demand = higher premiums
lower demand = more promo and discounts
 
I like to look at the price of silver and compare it to an hour's paid work.

It's pretty wild to think that most people could buy an Oz of silver by working for 1 hour.

Think of the process involved to extract an oz of silver from the ground. Then to refine it, move it, mint it and sell it to you.

Think of how small the market is, too. If everyone in Australia bought 10 Oz's a year, that's the entire global demand for investment grade Bullion gobbled up. Australia represents 1/320 of the world's population. 10 Oz's per year is nothing. As it stands today, it's only $320 AUD.

I feel absolutely privileged to be able to convert a fraction my energy into the compounded energy it takes to mine, refine, move, mint and sell an Oz of silver. That's exactly how I view my stack - future compounded tokens of energy.

[youtube]https://youtu.be/h0n5NPMcd6U[/youtube]

[youtube]https://youtu.be/yGGUgC7V-vs[/youtube]

[youtube]https://youtu.be/Hyh9SI5UhnY[/youtube]
 
There is NO shortage .
What there is
IS PRICE DISCOVERY .
JP Shmorgan are buying up future physical from the mining companies ABOVE spot ,80%-90% price for physical .
BUT
Because it's not traded on the " Open paper market " the price is NOT realised .
As my Geologist says.
What you have to keep an eye on , is .
The marging between spot & physical in the USA & here in Skippy the Kangaroo down under land .
The Americans are paying 50%-60% above spot for physical .
We are at 20%-30%

Whiskey opens up my braincells
 
in US premiums are steep, no wonder they import from Turkey and Italy
peaceful here to be buying at low premiums, for as long as it last...a year may be
it too much premiums, get some yellow one for skinny premium
 
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