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The price of silver today (Monday, May 22) is up 1.5% and trading at $17.05. According to data from FactSet, that puts the metal on track for its highest close since April 28.
After a nasty 13.2% drop in silver prices from April 17 to May 9, last week had us wondering if the silver correction had run its course.
We now have our answer, at least in the near term.
Silver has bounced back in a strong way following the low of $16.07 on May 9. Since then, it's up a big 6.3% to today's silver price.
The recent rebound has led some investors to say silver is back in bull mode and heading higher from here. But given the still-bullish position held by silver speculators, there's no guarantee that silver has completely finished correcting in the near term.
Recent Commitment of Traders (COT) data shows that speculators' long positions have indeed pulled back, with non-reportable positions falling by 706 to 29,040 from May 9 to May 16. However, they still remain high and can't be seen as a contrarian signal, at least not quite yet.
Trending: The 4 Best Silver Investments of 2017
But remember that this is just my near-term outlook. I still strongly believe that silver prices will post a big double-digit gain by the end of December 2017.
With that in mind, let's look at silver's big "recovery week" last week. Then, I'll share with you my bullish price target for silver this year.
Price of Silver Today Continues Last Week's 2.5% Rebound
After settling at $16.44 on Friday, May 12, silver opened much higher on Monday, May 15, near $16.70. Despite some weakness throughout the day, the metal managed to close at $16.60 for a solid 1% gain on the day.
Tuesday's action was much more orderly. Silver prices opened higher again at $16.72 on the back of a steadily weakening U.S. Dollar Index (DXY). They moved sideways until the early afternoon, then rocketed higher to $16.83 by the close. That marked a 1.4% rise from the previous close.
Here's a look at the DXY over last week…
Wednesday morning brought a bit of weakness as the dollar bounced, but silver still pulled off another daily gain. As the Dow Jones fell 1.8% for its biggest sell-off since last September, silver should've seen a bigger rally due to its safe-haven appeal. However, it only settled 0.2% higher at $16.86.
The metal opened lower on Thursday, May 18, at $16.70. It sold off throughout the day as the Dow Jones recovered from the previous session's decline. The price of silver fell 1.8% to close at $16.55.
But the silver price made a strong comeback on Friday as the dollar fell toward the 97 level. It opened at $16.81 and closed at $16.83 for a 1.7% daily gain. With that, silver posted a weekly rise of 2.5%.
The price of silver today is continuing last week's rebound. It's currently up 1.5% to $17.05 – the highest level of the month so far.
After becoming quite oversold, it was hardly surprising to see silver prices bounce back. The rally was admittedly stronger than I had expected, but I did say last week that we should look for a bounce.
However, the short-term picture indicates we could see more silver price declines. But that will eventually lead into a long-term rally by the end of 2017.
Here's where I see silver prices heading the rest of the year…
My Bullish Outlook on Silver Prices in 2017
About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.