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After becoming significantly oversold late last week, the price of silver has managed to show some strength.
So far, that bounce has been somewhat timid. But conditions are ripe for a strong rally.
We may have seen the U.S. dollar peak against its major competitors like the euro, the Japanese yen, and even the Chinese yuan a few days ago.
As far as macro concerns go, Turkey is still the biggest risk right now, especially as optimism regarding upcoming U.S.-China trade talks later this week has returned. The hope is that tariffs on $16 billion of Chinese goods (scheduled to kick in this week) and China's retaliatory tariffs could see some positive signs of easing.
As speculators jump into silver futures to cover their massive short positions, silver is showing signs of life once again.
If sentiment proves to have hit bottom and the dollar continues to weaken, then the price of silver may be able to put on an exceptional rally from here.
Here's exactly how silver prices are trending now…
Here Are the Latest Movements in Silver Prices
Silver fell pretty hard through the last trading week. Between the open on Tuesday, Aug. 14, and early Wednesday afternoon, silver lost 4.3%.
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But since then, the grey metal has climbed on balance. That closely coincided with the peak in the dollar. For its part, the U.S. Dollar Index (DXY) kept up its dramatic climb until just before 10 a.m. on Wednesday, when it flirted oh-so-closely with the 97 level before backing off.
Here's a closer look at DXY action for the past trading week:
Once the reversal happened, the dollar kept losing ground. Other major currencies began rebounding from oversold conditions, and by midday Monday, the DXY had lost 100 basis points since Wednesday.
That along with distinctly oversold conditions in silver set the stage for silver's own rebound. Here's how that looked:
Despite the DXY's reversal of fortunes, silver's bounce on Monday was rather muted.
It started out at the open around $14.70 and ended the trading day near $14.73.
But given last week's dramatic action, the bottom silver bulls have been impatiently waiting for may now finally be in.
Here's My Newest Price Target for Silver Prices in 2018
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.