Here's My New Target for the Price of Silver After This Week's Rally
Peter KrauthThere's no question the price of silver has made some bullish moves this week.
The silver price has climbed by 3% over that time, aided by a weak U.S. dollar and markets, both of which have also been suffering from growing volatility.
Meanwhile, the S&P 500 has given back a stunning 5.7% in the last week and is actually in the red on a year-to-date basis.
Some currency experts think the dollar might struggle next year, as the U.S. faces a possible economic slowing. That could prompt the Fed to pause its rate hiking sooner than expected, making the dollar relatively less attractive.
Even so, silver's recent behavior in the face of a rising dollar has been stellar. Read on for my analysis of just how well silver prices have held up against the greenback.
How the Price of Silver Is Trending Now
Although silver started out last Tuesday (Dec. 4) with an impressive rally, it was mostly thanks to a temporary bout of dollar weakness.
The dollar managed to bounce back, with the DXY hovering around 97.10 most of Wednesday, then backpedaled to consolidate near 96.8 most of Thursday. Silver had weakened into early Thursday, when the DXY finally stabilized, and silver bottomed that morning at $14.36.
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From there, the price of silver rallied to end the day at $14.44.
Here's the U.S. dollar index's action for the last five trading days:
As the DXY's sell-off bled into Friday, silver prices enjoyed more strength, rallying to end the week at $14.58.
Then on Monday, the markets managed a strong reversal after early selling, with the S&P 500 closing higher than Friday's close. That was accompanied by new dollar strength, pushing the DXY up to 97.2 by day's end. That weighed on silver, which backed off from Friday's levels to close at $14.50.
Here's where I think the price of silver will head now…