Silver with a nice breakout, will it be stopped in its tracks?
Silver bugs don't get too excited just yet!
As gold moved higher in recent days its younger brother silver has jumped onto the bandwagon and moved 8.8% higher from the lows seen in May. What we need to remember is that although silver is a precious metal it also has many industrial purposes. Medicinal, computer chips and industry all rely on the material and with the trade war unresolved we could be in for a bumpy ride.
In terms of the latest from Trump, it has been said Xi and the American leader are set to meet at the G20 meeting later in the month and that the talks are going well. I must stress that uncertainty is the key message as we have heard this all before and positive comments must be taken with a pinch of salt. Global growth is being downgraded all over the place and if the US president does not stop weaponising his financial tools the gold vs silver ratio could widen further.
In terms of the technicals, the silver price broke the trendline on the daily chart nicely and tested support at $14.65/oz to extend higher. Now we have hit some traffic at the 61.8% Fib zone with $16/oz looking just out of reach. On the weekly chart, $15.60/oz looks to be a formidable resistance level and any move beyond that point could have some more bullish indications and volume on the COMEX exchange seems to be backing this move....