Price Of Silver – In the gold and silver market between 2001 and 2011, the price of gold rose from a low of $256 to $1,920, an increase of about 650%. During the same period, the currency rose from a low of $4 to $49, a gain of about 1,100%, obviously more than gold.
If we look at the path of both precious metals to their 2011 peak, we will notice many ups and downs and consolidation patterns. First, prices rise to new highs, and then a period of consolidation will lead to higher prices. This is the general mechanism of the market that balances the situation of overvaluation and revaluation of assets.
Price Of Silver
Let’s examine this price movement between 2001 and 2011 in the bull market. To simplify the analysis, the first table below shows the period between 2001 and 2006 and the second table shows the period between 2006 and 2011. Each candlestick represents a month. If the candlestick is blue, it means that the price of silver is higher at the end of the month than when it started. A red light indicates the opposite.
Gold & Silver Ratio Spread
The yellow box shows the month of price increase before the next consolidation month (in the orange box). The price increase ends when the maximum price is reached (the increase). The consolidation period ends when the previous month’s profit is higher than the last profit.
We continue to see this model in value for money today. From the depths of the Covid 2020 crash, silver rose from a low of $11.50 to nearly $30 in August 2020. This miracle of almost three times increase in prices happened in five months. In addition, it is larger than any price increase in the last stock market, save for the last high in 2011.
With this step in price growth in 2020, the last consolidation period is deliberately omitted – it is well into its 23rd month in the consolidation period seen in the last stock market. This is not something new. If anything, the period of consolidation could indicate that sentiment toward cash inflows is diminishing in the near term. We may be in the final stages of the current phase of unity.
While some consumers are happy to see the price drop back below $20, most buyers can’t be bothered by the ever-low prices. This is nothing new either – it’s the nature of the market.
The Current Price Of Silver Today
Those who have looked at the price chart in recent years will secretly want to buy coins at a low level in the 2020 Covid market panic. However, they forget that extreme fear is also present when prices fall or decline.
Buffett does not advocate always buying at the lowest price, which is not obvious. He says that fear is a good indicator of when an asset will be a good value. Fear is a natural source of oversold in the market when money flows from one asset class to another.
The mantra “sell low buy low” is a simple four word phrase, but this principle is often emotionally difficult to implement. It is human nature to seek the attractive market of high prices and despise the silent market. In fact, most ‘buy low’ out of fear at the time. At the same time, because of the high risk in the market, they do not ‘sell high’, believing that the prices will increase.
The chart below shows how the stock price has correlated with the Dow Jones Industrial Average (DJIA) in recent years. In fact, mixed precious metal products have never been cheaper relative to the DJIA in 120 years! This is behind inflation, despite rising commodity prices, such as oil, metals, industry and grain.
Warning: Misleading Silver Supply And Demand Data
The last time the official US inflation rate rose above a low point of 8 percent was in the 1970s, a period of stagnant high inflation and low economic growth similar to today. It ended in gold and silver, hitting record highs of $850 and $49, respectively, in 1980. While history may not be fully told, it is often sung.
Even if we compare the price action of the past gold and silver market, the current market situation is very different from the early 2000s. For example, the monetary base of the United States was only about 800 billion dollars then, and today it is 5.6 trillion dollars. The national debt at that time was about 7 trillion dollars. Today it is worth 30 trillion dollars. The unfunded liability of the United States is now $169 trillion. Despite the turmoil and debate between the Fed and the government, no one has an answer to the ever-increasing debt problem.
The next financial crisis will be bigger and more difficult than the financial crisis of 2008. The gold and silver market is starting again, although it is still in its infancy, and price consolidation is nothing new now, gold and silver are repeating what they did in the market before. The case for owning gold and silver has never been stronger, and a huge transfer of wealth awaits those who know how cheap the metal is today? Traders and investors are likely to see silver as an industrial metal and as a store of value. The metallurgical outlook for the silver industry points to an outbreak of contagion and a potential slowdown in the global economy as it may hamper the silver market in the coming months.
For nearby silver futures, where prices have been in a supportive trading range for more than 4 years, look at the monthly resume, as seen by the support and resistance points on the chart.
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A move above the above-mentioned trading range means that a break above the long-term technical resistance at the $20.75 area would be a positive long-term development that would indicate that money is available.
If the price of gold continues in the coming months as the chart shows, it is a good holiday for the price of silver to rise as well.
Disclaimer: The views expressed in this article are those of the author and may not necessarily reflect those of Metals Inc. The authors try to confirm the accuracy of the information provided. However, neither Metals Inc. And the author cannot guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to exchange commodities, securities or other financial instruments. Metals Inc. And the authors of this article do not accept responsibility for loss and / or damage that occurs as a result of the use of this publication.
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The UK Parliament is looking to increase its regulation of foreign cryptocurrencies after the collapse of FTX on December 6, 2022 at 11:55 am. Investors are increasingly worried in the coming months. Under these conditions, it may mean that the market turns to precious metals such as silver. This can protect the value of your money which will also support the value of money.
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The currency gained a lot of strength after an event in November. The US Bureau of Labor Statistics released the Consumer Price Index (CPI), a measure of inflation over the past 12 months, for October at 7.7 percent. This is lower than last month’s 8.2% increase, which could indicate that inflation may be on a downward trend. The dollar-denominated CPI fell 4% in five days. A weak dollar can push up precious metal prices as demand increases. As a result, the 30-day currency rallied as much as 14.5% to its current price of $21.71 after hitting a low of $17.84 in September.
The US dollar and precious metals are often inversely related. Precious metals such as gold and silver are denominated in US dollars. This means that precious metals are bought and sold in dollars. As a result, when the currency is strong, investors can buy the currency at a cheaper price. Conversely, when the dollar depreciates, the metal becomes more expensive.
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