This Chart Reveals What’s Likely Next for Silver Prices

Silver-PricesSilver Prices are Closing in on an Important Buy Signal

The outlook for silver prices looks bullish. Silver investors should be keeping a keen eye on the gray metal, and related investments. Silver could see big gains ahead and this could happen very soon.  Hint, the U.S. dollar could be the reason.

Bearish U.S. Dollar Outlook Bullish for Silver?

One of the biggest reasons silver prices have taken a big hit in the last year is due to the rise in the U.S. dollar. Now, if you look closely, the dollar is declining compared to other major currencies and could go much lower.

Please look at the chart below of the U.S. dollar index. This is an index tracking the U.S. dollar compared to major world currencies. Pay close attention to lines on the chart.

US Dollar Index Chart


Chart courtesy of

From a technical perspective, since the beginning of the year the U.S. dollar has been in a downtrend with established support. Technical analysts call this pattern a “descending triangle.” It’s a bearish chart pattern that foretells that lower prices could be ahead.

Mind you; technical analysis aren’t the only reason why the U.S. dollar could go lower.

You see, we were told that the Federal Reserve will raise the interest rates in September. This never happened. Now, hopes of interest rates going up in December are fading away, too. Low interest rates are expected to remain for longer, and the U.S. dollar is declining.

This isn’t all. We are also hearing noise about the fourth round of quantitative easing. Yes, you read it right. We hear significant talk about how the Federal Reserve should print once again. If this actually happens, it will only add to the demise of the dollar and silver prices could soar.

Bulls Coming Back to the Silver Market?

If you look at the chart of silver prices, I see there’s solid momentum to the upside building up.

Silver - Spot Price Chart

Chart courtesy of

Silver prices now trade above their 50-day moving average and their 200-day moving average. This essentially says that the short-term and the long-term trends are pointing upwards and investors’ sentiment is bullish. At the very core, this is great for investors who have been looking at silver for a while.

Once again, you have to look at the fundamentals of the silver market as well.

They also suggest silver prices are setting up for an upside move. Consider the production from a different silver producing region. We see massive declines, and completely understand why this is happening; when silver prices are doing poorly, miners don’t really have incentive to produce.

Silver demand is also soaring. I have written about silver supply and demand here.

Why I Remain Bullish On Silver

Dear reader; just like gold, there’s severe pessimism towards silver prices.

I will be bold here and say this; don’t be shocked if silver, when it comes to percentage gains, outperforms many asset classes. The grey precious metal has a massive “On Sale” sign on it, yet continues to be overlooked. Time will tell more. But for now, I remain bullish.

I am paying attention to a few silver miners. They have been reducing their costs, increasing their grades, as well as their production. Once the silver market turns, they could see leveraged gains to silver prices.

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