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Silver prices are trying to regain footing and shake off recent volatility.
In the past trading week, we've seen the silver price gyrate up as much as 3.7% and down by 3.7%. While that may not sound like a lot, over such a short time frame, it's pretty fickle.
By comparison, gold has moved in a range closer to 2.5% over the same time frame.
Still, the outperformance of silver stocks relative to silver prices and gold stocks bodes well for the price of silver. That's because gold's outlook is attractive, making silver's in turn look absolutely brilliant.
A confluence of factors is combining to make silver a lucrative investment right now. Only those willing to partake will reap the benefits.
Now let's take a closer look at what's moving silver prices now...
Recent Moves for Silver Prices
Silver prices started out last week at $15.67 and ended lower at $15.47.
Silver was down more in earlier sessions, then Thursday saw the most silver price movement of the trading week. Silver prices opened for NY trading at 8 a.m. at $15.19, then immediately surged to $15.57 by 11 a.m. The silver price then bounced around somewhat but managed to close slightly higher at $15.59. This strength mimicked gold's, which reacted strongly to substantial new easing measures being announced by the European Central Bank.
Friday then saw silver open at $15.53, but fell in sympathy with gold to $15.48 by 10:30 a.m., to close in NY trading at $15.47. Monday, silver traded slightly higher -- $15.475.
Now let's explore silver's technical and comparative price action, as well as what could make it the more attractive of the precious metals in the medium and longer term.
Our Latest Silver Prices Outlook
Let's start with the technical picture.
After silver's late February sell-off that brought it down towards the 50-day moving average, silver prices have since bounced to approach their recent intraday peak near $16.00. However, silver hasn't managed to touch that intraday high.
Recent price action has taken the silver price back above its 200-day moving average, and the 50-day moving average continues to trend steadily higher.
In the chart below, the circled area shows an important silver-price trend:
You'll see how the 50-day moving average continues to rise and approach the 200-day moving average line. In gold's case, we recently witnessed such a bullish event, called a "golden cross," where the 50-day moving average crossed upward above the 200-day moving average.
It was a bullish sign that gold has higher to climb, and the same signal for silver would also bode well.
One fact that has caught my attention is the recent relative outperformance of silver stocks over gold stocks. I've charted the Global X Silver Miners ETF (NYSE: SIL) versus the Market Vectors Gold Miners ETF (NYSE: GDX) to illustrate this.
In just the past month, the extent of outpacing has been substantial. While gold stocks are up 10%, silver stocks are up 20%, doubling the return on the former.
Since the start of 2016, silver stocks have massively outpaced the silver price. With silver up roughly 10%, silver stocks are up about 40%, offering nearly quadruple the upside leverage provided by the metal.
This type of outperformance has often presaged a strong performance in the price of silver.
Still, I expect either consolidation or weakness in gold before it resumes its climb. Odds are, silver will follow in gold's lead. So expect similar action in silver before it too decides to head higher. The March 15-16 Fed meeting that kicks off today should provide further excitement. Stay tuned.
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