Benefiting from gold’s resurgence to start 2017, the iShares Silver Trust (NYSEArca: SLV) and ETFS Physical Silver Shares (NYSEArca: SIVR) are also climbing higher. Now, silver faces some important technical levels that if eclipsed, could result in significant upside.
Looking ahead, the ongoing negative interest rate environment, with European and Japanese central banks cutting benchmark rates deeper into the red to promote growth, could push investors toward precious metals as a more stable store of wealth.
Moreover, unlike gold, silver sees much higher industrial demand. The precious metal enjoys heavy industrial demand that benefits from an expanding global economy.
“Silver prices continue to work their way higher, now well above the neckline of the inverse H&S currently in play, above the July trend-line; contending with the 200-day MA for the past couple of sessions. If the move up is to continue, then this widely-watched moving average shouldn’t present much of a problem for much longer,” reports DailyFX.
Another fundamental catalyst for silver is increasing solar demand. The quickly expanding photovoltaic panel or solar industry could continue to drive silver demand. Installations and investment in solar panels, which incorporate silver for its electrical conductivity, are at record levels, reports Henry Sanderson for the Financial Times.
Ambitious traders looking for more near-term upside in silver can consider leveraged ETFs, such as the ProShares Ultra Silver ETF (NYSEArca: AGQ) and the VelocityShares 3x Long Silver ETN (NYSEArca: USLV).
Silver’s surge is also boosting mining ETFs, which are among this year’s best-performing non-leveraged ETFs. That group includes the Global X Silver Miners ETF (NYSEArca: SIL) and the PureFunds ISE Junior Silver ETF (NYSEArca: SILJ).
“There lies just overhead the upper parallel belonging to the trend-line off the December lows; we’ll need to keep an eye on how the market responds on further testing. It was very near the high the other day, but as an upward sloping line it not only will be a rising moving target, but is considered resistance of only a minor degree. The area surrounding 18.50 is our primary concern as resistance until the target at 19 is met. The 19 line is not only the peak in November, but also equals the measured move target based on the depth of the inverse H&S,” according to DailyFX.
For more information on the silver market, visit our silver category.