Silver investment: crazier than gold! After an 8% jump last week! Silver rose more than 3% to break through the 17 marks! Does the perfect storm continue?

After last week’s bull run, silver prices surged again in Asian trading on Monday, rising more than 3 percent on the day to break through the $17 mark and hit a high of $17.25.

Silver’s gains have been phenomenal, with the metal rising as much as 5% to close around $16.60 on Friday, up nearly 8% for the week.

Statistics from real-time data update website worldometers show that as of 11:25 Beijing time on May 18, there were more than 4.8 million confirmed cases of covid-19 worldwide, with a total of 4,802,024 confirmed cases and a total of 316,000 deaths, totaling 316,673.

Among them, the total number of confirmed covid-19 cases in the United States exceeded 1.52 million, with 1,527,664 cases, and the total number of deaths exceeded 90,000, with 90,978 cases.

Even as gold surged above $1,760, silver prices rose even faster, rising nearly 8% last week. All eyes are on silver as strong follow-on buying begins this week after Friday’s breakout.

Phillip Streible, chief market strategist at Blue Line Futures, said in a comment to Kitco News that the perfect storm of rising investment demand and falling supply is expected to continue to push silver prices higher.

Silver prices rose on Monday after rising 5.5% on Friday. Silver futures were trading at their highest level since late February. The precious metal has now recovered all of its losses in March.

Silver’s rally on Friday gained new momentum after the release of U.S. industrial production data for April, Streible said. The report showed industrial production fell 11.2 percent last month, the biggest drop in the report’s 100-year history.

Mining output, including gold and silver, fell 11.2 per cent, the biggest monthly decline on record, according to a breakdown of the report.

“Nobody in this report really talks about the mining data, but obviously someone is looking at it,” Streible said. The data suggest physical supplies are tightening. Silver is higher because the market is getting a lift from every Angle.”

Ole Hansen, head of commodities strategy at Saxo Bank in New York, said the next key resistance level to watch for as silver moves back above $17 an ounce is $17.50 an ounce.

He added there was room for silver to rise as speculative interest in the precious metal had fallen since early march as investors abandoned bullish bets on the metal as the covid-19 outbreak hit the global economy.

“We have to consider the risk of a second wave in the second half of the year, and the growing tensions between China and the United States,” Hansen said. Given these conditions, we expect equities to weaken again, the dollar and yen to strengthen on safe-haven demand, and silver to rise further on safe-haven demand and diversified demand.”

While speculative investors have been reluctant to own silver, Hansen said investor demand for silver trading products remains strong.

“Aside from a slight drop in March, ETF investors have continued to buy silver etfs since January. Total reserves hit a record 98 million ounces, “he said.

Technical analysis:

The dollar

On the daily chart, the U.S. dollar index is trading around 100.30, above its main moving average after three days of gains. Technically, the MACD red kinetic energy column expanded slightly, the RSI index hovered above 50, and the KDJ random index hit the overbought level upward, alert to the possibility of a pullback.

On the four-hour chart, the uptrend in the dollar index appears to be confirmed and is currently testing the 100.56 level, a short-term high, to see if it can break through. MACD green kinetic energy column preliminary appearance, KDJ random index hovering near the 50 level, short line or continue to shock.

silver

On the daily chart, the price of silver rose rapidly after breaking through the key resistance, the silver price broke through the key resistance of 100 moving average last week, is now testing the 200 moving average resistance, to see if it can stand 17 dollars. MACD red kinetic energy column gradually expanded, KDJ random index hit the overbought level, focus on the possibility of consolidation.

On the four-hour chart, the rally in silver has been even sharper, with the bulls pushing ahead after breaking through key resistance of 15.60 and now above all major averages above $17.20. MACD red kinetic energy column gradually expanded, KDJ random index has reached the overbought level, alert to short – term back adjustment.

Fundamental positive factors:

  1. According to statistics from real-time data update website world meters, as of 11:25 Beijing time on May 18, there were more than 4.8 million confirmed cases of covid-19 worldwide, of which 4,802,024 have been confirmed so far and 316,000 have died, amounting to 316,673.
  2. Us retail sales plunged 16.4 percent in April, the lowest on record, according to a Commerce Department report released on Friday, as the pillars of the us economy shrank in the wake of the coronavirus pandemic.
  1. According to a report by Reuters on May 15, the us Commerce Department has extended Huawei’s temporary license until August 13 but is also changing an export rule in an attempt to completely block Huawei’s chip supply chain. Under the rules, foreign companies using American chip-making equipment would need a U.S. license to supply certain types of chips to Huawei or its affiliates, such as hsi semiconductors.
  2. New claims for state unemployment benefits hit 2.981 million last week, labor department data showed on Thursday, bringing the total number of new claims since the coronavirus crisis to nearly 36.5 million, the largest job loss in U.S. history.

Fundamental negative factors:

1.The “first phase” trade agreement reached between the United States and China in January has not broken down, and the two countries are still implementing it, chief White House economic adviser larry kudlow said Monday.

2.Trump predicts that there will be more than 100,000 covid-19 deaths in the United States. Mr. Trump also took a sudden stance in favor of the dollar, saying it was a good time for it to strengthen and it was a great thing to have a strong dollar.

3.US President Donald Trump said on Wednesday he still strongly believes the federal reserve should implement negative interest rates, but gave a nod to fed chairman Colin Powell.

  1. Atlanta federal reserve bank President Raphael Bostic said recently that negative interest rates are not a good option in a time of crisis.

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