Silver (XAG=X) Seeing Shortage On The Industrial Side

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Silver
Ticker: XAG=
Price: $26.80

Silver Outlook

Silver has also had an outstanding year, with its gain almost double gold’s, Bloomberg reported. The rise has come off the back of a weakening US dollar, plunging real rates and geopolitical tensions — all of which give investors motivation to seek haven in precious metals.

Prior to the pandemic, investors were buying gold and silver at a 60/40 ratio, but now the buying is nearly 50/50.

When covid hit, silver was sitting in the $15 range, and had an immediate pull back because of the strength of the dollar, end of March, early April. It hit $13.92, and rose all the way to $29, which is a pretty meteoric, unprecedented run for a four to five month time table

Among the mining activities affected by covid-19, silver production has been the biggest victim.

Silver is still well below its all-time high of $49.52 reached on April 1 2011,
but since then the increase in usage for the electronics industry has increased dramatically.

While much of the industry is ramping back up, some mines have had to close again as covid-19 cases surge. The Silver Institute now predicts a market deficit for the first time in five years.

The world has seen a 13% decline in mined production from Latin America this year, with global supply set to shrink 7.2%. That is based on 67 million fewer ounces coming out of the region, which would be enough silver to make about 100 million solar panels.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 29.96.

The projected lower bound is: 24.01.

The projected closing price is: 26.98.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 30 white candles and 19 black candles for a net of 11 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 25.3399. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 53.34. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 20 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -51. This is not a topping or bottoming area. The last signal was a sell 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 19 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAG= closed down -0.190 at 26.810. Volume was 8,900% above average (trending) and Bollinger Bands were 40% narrower than normal.

Open     High     Low     Close     Volume
26.909   26.920   26.740  26.810    4,160

Technical Outlook
Short Term:        Neutral
Intermediate Term: Bearish
Long Term:         Bullish

Moving Averages: 10-period     50-period      200-period
Close:           27.32         24.07          18.55
Volatility:      41            74             53
Volume:          416           83             21

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

PREC.M.XAG= is currently 44.5% above its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future.

Our volume indicators reflect very strong flows of volume out of XAG= (bearish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 2 periods.

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