The Magnetic Powers Of Silver

February 5, 2018

London (Feb 5)  Silver had been running into congestion and resistance each time the price of the metal traded over $17.30 and it had been able to move above $17.50 per ounce since September. Recently, volatility returned to the precious metal as the price spiked down to the lowest level of 2018 when nearby March futures traded at $16.735 on January 23. The selloff was quick and painful for those sitting with long positions, but it led to a break to the upside as silver exploded above the $17.50 level on its way to the high on January 25 at $17.705. The on February 2, the wild silver market traded back down to an even lower low at $16.635. Silver made two lower lows and a higher high since January 23. All that was needed for a bullish key reversal trading pattern was a close above $17.45 per ounce for the week that ended on January 26. However, as silver often does, it teased the bulls with a settlement price of $17.441 on Friday, January 26 and by the next Friday, it traded over 80 cents lower.

Silver is the toughest precious metal to trade because of its penchant for price volatility. The wide price variance at times is both a curse and blessing for the metal, and it is the reason that speculators tend to flock to the silver futures market when it looks like a trend is developing.

Speculators love silver

Over my career in the commodities market, I was fortunate to work for one of the world's leading bullion dealers in the 1980s and 1990s. I learned, early on, that silver is the one commodity that attracts the most speculative interest because of its penchant for extreme price volatility at times.

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