The Price of Silver Could Jump 40% in the Next 7 Months

Peter Krauth

Yet another lackluster week for the price of silver has left the metal trading in a range near $14.15 per ounce.

Volatility is low, and that has kept sentiment in the toilet. It's little wonder.

Whether up or down, traders have few opportunities to make money trading an asset that moves so little.

But volatility won't stay low forever. This past year, silver volatility was nowhere to be found until June, when silver prices sold off and the action was nearly all downward.

Urgent: This catastrophe could bring the U.S. economy to its knees – and make the Great Recession seem like a day at the beach. Read more…

Now silver is at levels close to its late 2015 lows. With the metal so badly oversold, I'd expect the bias to be mainly to the upside once volatility returns. And it will…

Here's What This Week's Silver Price Action Looks Like

Although silver's range has remained pretty narrow lately, it has seen a little bit of action.

On Tuesday, Sept. 11, the price of silver dipped momentarily to $13.98 around 9 a.m. as strength returned to the dollar after a short dip. The U.S. Dollar Index (DXY) had retreated to below 95, then rallied anew to spend most of the day around 95.2. Despite that, silver prices too rallied back to close the day at $14.14.

Further dollar weakness on Wednesday dragged the DXY back down to 94.85 by late morning, where it consolidated the rest of the day. That pushed silver higher to $14.26 by 1 p.m., then it retreated slightly into the close.

Here's what the DXY did over the past five trading days:

Although silver benefited from further dollar weakness on Thursday, a reversal on Friday sent the grey metal back down to end the week at $14.06.

But on Monday, trade war fears resumed with the DXY dialing back about 50 basis points to 94.50 from Friday's high. U.S. President Donald Trump wants to proceed with tariffs on $200 billion of Chinese goods, and China appears unwilling to negotiate under duress.

That dented the dollar and allowed silver to rise on Monday to a midmorning peak of $14.23 before softening mildly to $14.17 by midafternoon.

Here's my next price target for the price of silver in 2018…

Here's Where the Price of Silver Is Headed Next