Although the silver price is down 1.8% over the last week, silver could be on the verge of another bull run...
In fact, a quick comparison of silver and gold charts in October will show you that silver's actually done better than its richer cousin.
Despite being down 3.7% since Oct. 13, the price of silver is still up 0.5%. On the other hand, gold prices are actually down 0.9% for the month.
One reason for silver's outperformance is its industrial and consumer demand, the latter of which has steadily risen over the last three months. The U.S. Mint reported 11,000 one-ounce Silver Eagle coins have been sold this month. That's up 37.5% from 8,000 in September and up 69.2% from 6,500 in August.
Meanwhile, silver stocks have dropped after a recent uptrend, with the Global X Silver Miners ETF (NYSE Arca: SIL) down 3.8% in the last two weeks. But silver miners technically may have formed a bullish pattern portending a possible near-term rally.
As news of Trump's tax plan continues to push the Dow Jones higher, money and attention are being sucked away from silver. Still, I think silver prices are forming a bottom in sentiment that could be setting the stage for their next bull run.
Before I show you my high silver price target for the end of December, here's a recap of silver's decline over the last week...
Silver Price Falls 1.8% Over the Past Week (Oct. 24-31)
Silver started last Tuesday, Oct. 24, on a weak note despite the U.S. Dollar Index (DXY) - which measures the dollar against the euro and other currencies - also declining.
Since silver is priced in the dollar, a decline in the currency typically lifts silver prices, since the metal becomes cheaper for users of other currencies. This often boosts demand and therefore boosts prices.
However, both silver and the DXY ended the Oct. 24 session lower. The DXY fell from 93.94 to 93.77, while the price of silver dropped to $16.97 for a 0.6% decline from Monday's settlement.
This unusual pattern of silver falling alongside the dollar continued into Wednesday. As the DXY fell from 93.77 to 93.71, the silver price tumbled to $16.92 by the close. That marked a 0.3% loss for the day.
Thursday saw the pattern break as the dollar rocketed while silver prices plunged. The DXY surged from 93.71 to 94.61 - the highest settlement since July 19. The metal responded with a 0.7% drop, closing the day at $16.81.
Here's the DXY's performance over the last week...
Friday was another tough day for the price of silver, as the dollar rallied further. The DXY started out near 94.80 and, by 10:00 a.m., had rallied to 95.13, gaining an astounding 163 basis points since early Thursday. That dragged silver 0.4% lower to close the session at $16.75.
Silver prices bounced back yesterday (Monday, Oct. 30) as the DXY fell back to the 94.50 level. The metal climbed 0.6% on the day, to close at $16.85.
But the silver price today (Tuesday, Oct. 31) has fallen back to last Friday's level as the DXY bumps back up to 94.60. It's currently down 0.4% and trading at $16.77.
Urgent: Executive Editor Bill Patalon just saw something on his precious metals charts he's only seen twice in 20 years. He calls it the "Halley's Comet of investing" - and it could lead to windfall profits. Read more...
The rallying dollar has dominated silver's movement this year. Despite its unstoppable rally from 91.35 to 94.60 since September, the DXY is set to top out soon, likely in the 96-97 range, as I mentioned in this week's gold update.
But the movement in silver stocks will also dictate where the silver price moves from here. Silver stocks often lead the metal's spot price, and since I expect silver stocks to rebound, the silver price should follow suit.
Here's exactly how high I see the price of silver reaching by the end of December 2017...
My Silver Price Prediction for the Rest of 2017
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If we look at the performance of silver mining stocks - represented by the Global X Silver Miners ETF - since July, we can see an interesting pattern forming...
You can see a classic head-and-shoulders pattern that's formed since the July 7 bottom. The shoulders are marked in blue and the head in green, with the neckline in yellow. The ETF's decline below $33 on Oct. 25 confirmed the pattern.
We can also see a 1.4% bounce since last Thursday, marking a slightly higher low than the one in July. This is typically a bullish signal, which is why I think silver stocks could push higher from here.
And since silver stocks often lead the silver price, their movement will be important to watch in relation to the silver price.
As for silver itself, yesterday's bounce appears to be an uptrend line...
An uptrend line indicates the metal may rise up to around $17.60 in the near term. That would be a 4.9% gain from today's price of $16.77.
Prices will also receive a boost from strengthening demand. While I already mentioned silver's strong consumer demand in October, analysts see silver's industrial demand also improving...
In a note released this week, financial services provider INTL FCStone reported industrial demand for silver now accounts for over 50% of all silver consumption. Meanwhile, gold's industrial demand only makes up 17% of the metal's total consumption.
With all of this in mind, I think we could see a run to $18.50 at least before the end of December. Better yet, we could even see north of $20 if silver stocks fulfill my prediction and lead the way higher.
Up Next: Rare Gold Anomaly
Money Morning Executive Editor Bill Patalon just caught something on his gold charts that he's only seen twice in the past 20 years. A $13 billion gold anomaly he calls the "Halley's Comet of investing."
It's very rare, and fleeting, and Bill sees things lining up perfectly to bring some very sizeable precious metal profits to well-positioned investors.