The Price of Silver in 2018 Is Down, but the Long-Term Outlook Is Still Bullish
Peter KrauthAs the price of silver in 2018 continues to struggle, has the precious metal found its bottom?
Given the challenging sentiment and momentum silver is facing, it could still drop a bit lower before finally beginning its rally.
The silver price has been testing the recent low it established in early July, as hot money dropped commodities in favor of cash and short-term bonds.
But with sentiment so low and fundamentals so bullish for silver from both industrial and safe-haven demand perspectives, the outlook for silver remains bright.
We know silver plays second fiddle to gold, and the king of metals is finding the current environment challenging as it tries to find a path higher. So as gold looks to establish its own footing, silver will likely follow suit and wait for gold's cues.
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Both metals tend to perform well at this time of year as we work towards the end of summer.
My view is that silver needs to see sentiment finally washed out so that everyone who's lost conviction has sold. From there, bargain hunters can step in, start buying, and take the metal to new highs.
How the Price of Silver in 2018 Is Trending
To call the past week in silver trading lackluster would be an understatement. The metal has lost its shine recently, struggling to stay above $16.
After peaking on July 9 at $16.10, silver then proceeded to work its way lower opposite the gaining dollar. Silver would hit $15.74 on Wednesday, July 11, as the DXY was reaching 94.80.
Then in early Friday morning trading, the DXY peaked at 95.20. After a run up to $15.96 at mid-day Thursday, silver was beaten back to test its recent lows near $15.73.
Here's the action in the DXY for the past week:
Then on Monday, despite a further retreat in the dollar index that consolidated tightly around 94.5, silver was only able to claw back a few cents to end the trading day at $15.76.
Now that we've seen how silver prices are trending, here's my outlook for silver in the second half of 2018…