Finding Opportunity In Mild Silver Prices

July 14, 2017

Last quarter, Taki Tsaklanos—lead analyst at Investing Haven—told MarketWatch that because silver tends to peak in April, the precious metal had likely peaked for the year. Indeed, silver peaked for the month of April at about $18.50 an ounce, far higher than its current mark—and the precious metal has thus far failed to recover. Tsaklanos remains bearish on the prospect of gold returning any time in 2017, which at first strike seems like bad news for silver bugs.

Above: APMEX.com’s chart showing where silver has moved since the peak in April.

But is this disheartening news? Is silver really stuck below $18.50 per troy ounce on the year? It certainly looks that way. But zooming out and including 2018 in our long-term projections, it turns out there are reasons for optimism.

Once-in-a-decade” Opportunity

“We are bearish,” Tsaklanos said more recently on the subject of silver, thus confirming that everything has lined up with the predictions made in April. But the story doesn’t end there.

“We see a once-in-a-decade opportunity” to invest in gold and silver, said Tsaklanos. Rather than seeing a pessimistic outlook, Tsaklanos believes that the remainder of 2017 will be a “long-term bottom” for the precious metals, which in turn would mean they’re both destined to go up. That makes the next six months a unique buying opportunity, if one agrees with this analysis.

Why Investors Should Think Long-Term

Gold and silver aren’t usually fodder for day trading. Instead, these investments are supposed to be seen as long-term hedges against a variety of problems: issues in the stock market, issues with paper currencies, and ultimately, the changing economic landscape around us. This means that silver and gold’s prices, though worth watching on an individual basis, tend to remain stable over the long-term, especially when compared to a variety of other asset classes and economic indicators.

Investors need to think long-term on these precious metals and use up buying opportunities, even if those buying opportunities seem to last far higher than they would for individual stocks. If it’s true that gold and silver are headed to a buying opportunity that could last half a year or more, then there’s no need to rush into any decisions.

Using Silver As An Economic Indicator

It also helps to think of silver as something of an economic indicator. It rose to new heights when the great recession changed the economic landscape. It settled back down as the system stabilized. Like the Big Mac index, the value of silver is a great way to view the value of other items. And if the U.S. dollar is strong enough to buy more silver right now, then it does indeed mean there’s a buying opportunity in the works. The only questions are how long it will last—and when silver might show signs of recovering, even in the long-term future.  

Darren Capriotti

Darren Capriotti has been a market analyst for the past decade and is an expert in precious metals. He prides himself on his ability to analyze the market and offer true value to investors with questions about gold, silver, and other precious metals. Highly educated, incredibly passionate, and more accurate than most, Darren offers a true, unbiased look into what investors can expect in the precious metals market. You can reach Darren at dcapriotti@gold-eagle.com.

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