It seems the price of silver has been spiraling out of control lately, down 13.2% from its $17.71 peak on June 6. This morning, it traded 1.3% lower at $15.37 – the lowest since prices closed at $15.38 on April 8, 2016, over 15 months ago.
The metal took an undeserved punch in the gut last Friday, July 7, when silver prices fell 2.3% following the stronger-than-expected June jobs report.
But the even bigger news for the silver price last week may not be its latest weakness, but rather a flash crash on Thursday evening around 7:00 p.m.
Some are calling the event a "market glitch," but experts are blaming high-frequency trading by computer algorithms, whereby selling feeds on itself at lightning speed. And sadly, these events are becoming increasingly common.
You'll note this flash crash was significant, pulling silver down 8.7% very briefly from around $16.10 to $14.70. Although silver recovered quickly, it may have set the tone for Friday's session alongside the jobs report.
All of this begs the question of whether or not silver prices are at a bottom yet. Judging by certain technical indicators, we may be near a bottom now, and I think the metal will rally higher as demand from one of the world's biggest silver markets continues to explode.
Before I tell you more about my bullish silver price prediction, here's a recap of late last week's performance…
Price of Silver Posts 6.5% Weekly Loss Following July 6 Flash Crash
Picking up where my last silver update left off, silver opened on Thursday, July 6, at $15.97. That was higher than Wednesday's close of $15.84. But a morning surge in the U.S. Dollar Index (DXY), from 96.16 quickly up to 96.50, kept the silver price lower throughout most of the day. It still managed to settle 0.6% higher, at $15.93, than the previous close.
However, the biggest action didn't happen until around 7:00 p.m. on Thursday night, when silver experienced an 8.7% flash crash.
The red line in this chart shows the dramatic 8.7% decline…
And on Friday, July 7, as the stock market rallied after the U.S. Department of Labor reported 222,000 jobs were added last month, precious metals suffered. Silver opened lower at $15.90 and sold off to $15.39 in morning trading.
From there, it managed to attract a little buying, which pulled it back up to $15.57 by the week's close. With that, the silver price posted a 2.3% loss on the day and 6.5% loss on the week (June 30 – July 7).
The losses have continued this week as the silver price today (Monday, July 10) fell 1.3% to a 15-month low of $15.37 this morning. With that, it's clear investors are nervous about silver's long-term potential as they continue to engage in profit-taking.
But if we examine the silver market from technical and demand perspectives – the latter regarding the world's largest silver-importing nation – you can easily argue that prices are poised for a rebound.
In fact, I could see the price of silver rebounding 43.1% from its current level to $22, and these charts support my bold and bullish forecast…
Why I Expect the Silver Price to Gain 43.1% to $22 by the End of 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.