The silver price in 2017 had climbed almost nonstop until last week. After prices bottomed in late December, the precious metal gained over 8% between Dec. 23 and Jan. 20.
But then, as if needing to digest those relentless gains, the price of silver has begun to pull back in the past week as it entered consolidation.
Last week, I told you not to expect that pace of silver price gains to continue unabated. Sure enough, that's what we saw recently.
There are some technical drivers that should support silver prices in the near and longer term. And we'll explore those.
But first, here's why silver prices fell last week...
Why the Silver Price in 2017 Started to Fall Last Week
Silver started out on Monday, Jan. 23, on a strong note. Prices opened at $17.13 and proceeded to work their way higher throughout the day. They closed 0.4% higher at $17.20 per ounce.
The silver price losses began on Tuesday when it opened lower at $17.08. Although it shot up to $17.21 at 10:00 a.m., it immediately reversed. It worked its way 0.9% lower to close out at $17.05.
Don't Miss: Profit from the Silver Price in 2017 with This Free Guide
The price of silver fell below $17 on Wednesday as the Dow Jones Industrial Average's jump above the 20,000 mark affected global markets. Although it opened at $16.89, sellers overwhelmed buyers as the Dow sucked away all the attention. Needless to say, precious metals lost some of their safe-haven allure. Silver prices made a brave effort, climbing higher, but still settled 0.4% lower at $16.98.
On Thursday, Jan. 26, the silver price saw more weakness surged higher. Silver opened lower at $16.82 and kept falling during the session. It closed the day 1.4% lower at $16.74.
Then on Friday, silver opened lower yet again at $16.68 but bounced higher with gold prices as the dollar reversed. By late morning, the price of silver was up to $17.15. It closed the day 1.7% higher at $17.14. However, it saw a weekly loss of 0.6%.
But last week's pullback is just a temporary reaction to the record-high stock market. I'm still bullish on the silver price in 2017.
In fact, here are the two technical indicators pointing to a silver price gain of 27.5% this year...
2 Indicators That Will Push the Silver Price in 2017 Another 27.5% Higher
[mmpazkzone name="end-story-hostage" network="9794" site="307044" id="138536" type="4"]
The first indicator is silver's 50-day moving average, represented by the blue line below...
After slicing cleanly through its 50-day moving average, silver prices have now stalled. I would not be surprised to watch the same 50-day moving average of $16.66 now act as a support. Silver could come down and "test" that level, but I would not expect to see it go much lower before heading higher again.
The second technical indicator that may be pointing to higher silver is the gold/silver ratio. It seems to have been stuck between 70 and 72 since mid-December...
And interestingly, its range has been narrowing, suggesting a breakout soon either to the upside or downside.
Also worth noting is that the 200-day and 50-day moving averages are converging together with the current level of the gold/silver ratio at 70.60.
Given these bullish fundamentals, I'd expect the ratio to peak again soon as the silver price resumes its rise faster than the gold price.
The next targets higher are $17.25, then $18 (maybe even $19), levels I think will be taken out this quarter. After that, look for $22 as the next stop, which would be a 27.5% gain from today's silver price of $17.25.
Urgent: A perfect storm is brewing... bringing with it the greatest wealth event in 20 years. Find out more.