Why the Silver Price Rallied to a Monthly High This Week

Peter Krauth

Though sentiment for silver speculators has retreated in the last few weeks, and its technical picture has improved, it doesn't have quite the same setup as gold.

Still, there are some technical indicators, as well as fundamental ones, pointing to internal strength in the silver price. Today (Tuesday, May 30), silver prices are mostly flat in morning trading, down 0.17%.

And fundamentally too, silver miners are doing pretty well. Profits have remained strong in Q1, and although you wouldn't know it from their share prices, silver miners' cash flow has remained robust.

At some point, and I suspect before long, they're simply going to have to revert to the mean and catch up.

So from that perspective, silver stocks are looking rather attractive at this juncture.

Before I get to my prediction for the price of silver moving forward, here's how the silver price has been trending…

Why the Silver Price Rallied Last Week

Silver actually had a pretty good week last week, all things considered. After a dip and quick recovery in the previous week, silver managed to grind higher.

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It started Monday morning (May 22) strong at $17 even, then just kept climbing. By 2:00 p.m., that rally had tacked on another $0.16 to bring the silver price to $17.16. That's when it began to weaken a little, eventually closing at $17.14.

Tuesday saw some of those gains given back. The metal opened at $17.11, then quickly bounced to $17.25. That's where it peaked, because the U.S. Dollar Index (DXY) bottomed, then rallied. Silver dropped to $17.06 by 1:00 p.m., then bounced and retreated to close at that same level.

Wednesday brought an early morning reversal, with silver bottoming at $16.89 at 2:00 a.m. By the open, it was back to $17.07. From there, the silver price kept climbing as the DXY weakened. By the end of the trading day, silver was back up at $17.21.

Here's a look at the U.S. Dollar Index for the last trading week.

On Thursday, the silver price action was rather quiet. It opened at $17.19 and backed off as the DXY rose. By the close, silver traded hands at $17.11.

Then Friday brought renewed strength despite a higher dollar. Silver started out at $17.25, then after a little back and forth, closed out the week at $17.31. According to Kitco, that was its highest price for the month of May.

Now that we know why the silver price rallied last week, here's what's next for the precious metal…

What to Expect from Silver Prices Now

Peter Krauth

About the Author

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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.

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