Silver futures and ETFs are gaining on Monday, as investors swoop in to buy at perceived bargains following significant losses last week.
According to experts, there has also been some chart-based buying on technical analysis levels.
“March silver futures bulls still have the overall near-term technical advantage and are working to restart a price uptrend on the daily chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the February high of $30.25 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at today’s high of $27.695 and then at $28.00. Next support is seen at $27.00 and then at $26.50,” wrote Kitco analyst Jim Wyckoff.
March Comex silver climbed $0.536 to trade $27.555 an ounce, a nearly 2% gain, helping to boost the the iShares Silver Trust (SLV) 2.04%.
Other markets are also helping to generate interest in silver, as investors are moving into stocks, Bitcoin, and many other commodities thanks to heightened risk-on attitudes.
“Slowing coronavirus infections, continued rollout of vaccines and anticipation of President Biden’s $1.9 trillion rescue package are keeping the bull market well and truly alive,” said one broker in a morning email dispatch.
Investors are invigorated by news that Treasury Secretary Janet Yellen asked Congress to pass President Biden’s stimulus plan this weekend, suggesting that the results of the bill could include the U.S. gaining full employment by next year.
“There’s absolutely no reason why we should suffer through a long slow recovery,” Yellen said during an interview on CNN’s “State of the Union.” “I would expect that if this package is passed that we would get back to full employment next year.”
Other financial analysts supported higher moves in silver.
“Silver markets have gapped higher to kick off the week on Monday, turned around to fill that gap, and then rallied again. Ultimately this is a good sign that the silver market is ready to continue the overall attitude to the upside, and therefore I think it is worth paying attention to solar and whether or not it can make a serious challenge towards the $28 level. If we can break above that level, then it is likely that we could continue to go much higher. At that point, I would anticipate that the market would go looking towards the recent highs at the $30 level, which of course has been major resistance in the past,” wrote Christopher Lewis of fxempire.com.
For investors looking for leveraged silver ETFs, the VelocityShares 3x Long Silver ETN Linked to the S&P GSCI Silver Index ER (NasdaqGM: USLV) and the ProShares Ultra Silver (NYSEArca: AGQ) are both places to start.
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