While the 10.9% gain for silver prices in 2017 still leads over gold's 10.5% year-to-date gain, the former saw a sharp downturn last week.
Indeed, I had warned just last week that the price of silver would need to close above the $18.54 peak last reached in late February.
Not only have we not seen that happen, but silver has also been in a retreating mode over the last five trading days.
With a 200-day moving average around $18.10, the silver price's recent close below that level makes it all the more crucial to watch. Momentum indicators are clearly trending downwards, and silver mining stocks have seen similar weakness of late.
Still, it's important to remember that this decline in silver prices is healthy. The metal can't rally all year without a brief correction.
I still think silver will head higher this year, which is why I'll update you on my short-term and long-term predictions for silver prices in 2017.
First, here's a recap of the metal's sell-off last week...
Silver Prices Fall 3.3% Last Week (4/17 - 4/21)
After closing the previous week at $18.51, the price of silver opened a bit lower on Monday, April 17, at $18.50. It fell further throughout the day to settle 0.6% lower at $18.38.
Tuesday's action in silver actually mirrored that of the U.S. Dollar Index (DXY). Silver prices opened higher at $18.34 and plunged throughout the day alongside the dollar. Although it bounced back from the intraday low of $18.09, the metal still closed at $18.25 for a 0.7% loss.
Free Report: The Essential Guide to Buying Silver & Gold
The silver price opened lower on Wednesday as the DXY rallied from its recent lows. As the dollar neared the 100 level, the silver price kept falling and settled at $18.13 for a 0.7% decline.
Here's a day-to-day look at how the DXY trended last week...
On Thursday, April 20, silver prices once again mirrored the dollar's behavior. As the DXY rallied from midday to the early afternoon, silver also rallied alongside it despite falling in morning trading. But the silver price rally wasn't enough to give the metal a daily gain. It still logged a 0.7% loss and closed at $18.
Friday was no different as silver's losing streak continued. Prices fell below the $18 level and eventually closed 0.6% lower at $17.89 - the lowest close since March 24. That marked a weekly loss of 3.3%.
Last week's silver price decline serves as a big indicator for what's ahead in both the short term and long term.
Here's precisely where I see the price of silver heading this year...
Our Short-Term and Long-Term Forecasts for Silver Prices in 2017
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Weak silver in the face of a softening dollar does not bode well for near-term silver prices, as the metal typically moves inversely to the greenback.
By the end of the day on Friday, April 21, the price of silver closed at $17.89. This was far below the crucial 200-day moving average of $18.11.
In the chart above, you can see both the RSI and MACD momentum indicators confirming silver's downward price direction. In fact, the MACD's short-term indicator (black line) has just crossed downwards over the medium-term indicator (red line), which is a bearish signal.
Meanwhile, according to recent Commitment of Traders (COT) reports, "smart money" silver hedgers are at a new all-time extreme bearish position. Speculators are also near an all-time bullish extreme in silver futures, a contrarian signal that's also bearish.
With all of that in mind, I expect short-term silver prices to fall to as low as $17. That would only be a 5% drop from last Friday's close of $17.89.
But over the next few months, once silver returns to rally mode, I'll be looking for a bullish golden cross buy signal when the 50-day moving average overtakes the 200-day moving average.
After that, look for momentum to drive the silver price 23% higher to $22 by the end of 2017.
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