5. Bullish chart indicators
From a chart perspective a bottom is forming on SLV though the 10 day trend line is bearish the 40 day, 100 day and MACD are all intact for a bullish move. Support levels are sitting at 23.21, 23.10 and 22.92 and resistance points are currently at 23.50, 23.68 and 23.79. The key take away here is Silver has very strong support in the low 23.00s.
4. The massive COVID Relief Bill
on Saturday the senate passed a 1.9 trillion dollar relief bill. The bill includes $1,400 in additional handouts for Americans making 80,000 dollars or less as well as a $350 billion dollars in aid to state and local governments. The rest is going to other “projects” like a 1.5 million dollar bridge connecting New York and Canada, a 100 million dollar underground rail project in Silicon Valley; 480 million for native American language Preservation. This is a few of countless other things in the bill. The more a country prints with fiat currency the more it dilutes the dollar. Meaning the dollar will be worth much less than it was. If you look at past data inflation has gone up 239.7% since 1980. Which means investors will move their dollars into metals and other valuable items.
3. Relatively low volume.
SLV only traded slightly over 18 million shares today and closed at 23.32. The last time SLV only traded less than 18 million shares was on January, 26th where only 13.8 million shares were traded and closed at 23.65. The reason those two dates are significant and gave low volume is because of the uncertainties. On January, 26th the House (Democrats) delivered the Trump impeachment article to the Senate. The Senate also approved of Yellen as Treasury secretary. Currently investors are dealing with higher Treasury yields and potential inflation.
2. Investors are moving cash into metals.
During trying times historically investors have always moved their money into tangible assets being gold, silver, platinum or rhodium. Metals have always held value and when a demand increases it causes SLV and other silver or miner stocks to move up.
- Supply and demand
According to the Silver Institute. the supply is -5% for mine production and -36% for net hedging supply. Which leaves us with some thinking to do here. IF silver isn’t being mined fast enough to keep up with business’ demands as business’ open, we may see another silver shortage like we did in March 2020.
Disclaimer: this is my own research and opinion. I am in no way a financial advisor, consult your financial advisor before buying any stock or investing.