A1 Trading Company

Ticker tape by TradingView

July 15, 2020

Time to Buy This Precious Metal?

Frank Cabibi

For the past few months, you may have seen metals like gold outpace the market as monetary policy degrades fiat currencies like the USD. Gold has surpassed all-time highs in the last week, and a lot of attention has been focused on it. But, today I want to talk about about a metal that has been quietly on it's way to breaking 4-year highs and continues to gain demand in global uncertainty.

Silver prices have gained 66% since the crash in late March. There have been some arguments against fiat money that governments prevent pairs to be traded in a free market through "currency manipulation". We've definitely seen market manipulation in the US from the Fed, but according to Kitco News, we are witnessing the same thing with currencies.

With that in mind, silver grows in demand as investors move their money from "uncertain" currencies and into this money-making metal. In another article by Kitco News, they mentioned how production has decreased during the shutdowns. What we can expect from this, as it has already happened, is that demand for silver will get even bigger, especially from all the factors I mentioned above about fiat currency.

What I think

https://www.cmegroup.com/trading/metals/precious/silver.html

Here is a table reporting silver futures through December. Because there is not much demand in the futures contracts, it might seem like silver has already reached a peak for this year since the price is already in the $19s range. However, I don't think that silver is not going to be a good long.

My thesis relies more on a greater economic downturn where the USD will not be such a great investment over time, but metals will.

https://www.statista.com/statistics/244983/projected-inflation-rate-in-the-united-states/

This is a table of projected inflation rates for the year 2021 provided by Statista.com. Notice how this year is significantly lower than that of 2021. That will be the highest jump in inflation since 2011. All of this is due to the amount of money printed in such a short time to help fuel the market. Eventually, in my opinion, the USD will be worth a lot less in the coming year compared to other 'safe havens' like metals. According to MarketWatch, silver has historically done better than US market surges, and metals like gold and silver also tend to gain strong momentum after financial stress hits global markets.

I think a break above $19.40 will be a good sign for bulls as a new support level could form. If prices come back down, I like the support around $19.15000s at the previous dip.

Featured Photo: https://responsive.fxempire.com/cover/1845x1230/webp-lossy-70.q50/fxempire/2019/10/silver-image2.jpg


Thanks for reading! If you are interested in joining our trading community, we have chat rooms, trade alerts from our top traders, and educational content. You can join using the link below, and get a discount on your membership.

Disclaimer:

Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.

A1 Edgefinder

#1 Market Scanner Tool
Take 10% off using code "READER"
GET ACCESS NOW
Want to See Our Trades?

Join The VIP Community!

Our entries, exits & analysis
Live Webinar Coaching
Trading Chatrooms
Strategy Library 
Exclusive Trading Guides
Use Code "READER" for 10% OFF!
JOIN NOWJoin FREE Discord
Listen to More Episodes
Even More Bullish USD News

This morning at 8:30 am Eastern Time, the United States’ Bureau of Economic Analysis released even more bullish USD news. The Core Personal Consumption Expenditures (PCE) Price Index, which measures changes in prices for consumers (excluding volatile food and energy prices), rose more than expected month-over-month. A 0.5% increase was expected for August, with 0.6% […]

Read More
Historic Peril for the Pound

A strange series of events recently sent the United Kingdom’s Pound Sterling tumbling to historic lows. Just weeks after the death of Queen Elizabeth II (a head of state who was uniquely well-liked among the UK’s population by contemporary standards) Kwasi Kwarteng, Britain’s new chancellor in recently appointed Prime Minister Liz Truss’ administration, issued a […]

Read More
Get Ready for the Bear Market

Last week’s selloff was brutal for investors in the US stock market: the Dow Jones Industrial Average closed at its lowest level since late 2020, falling to 29590.41, losing 1.6% on Friday alone. With the S&P 500 currently down a whopping 23% from January’s highs this year, and other indexes close behind percentagewise, stock market […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
VIP
Menu
homesmartphonelaptopmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram