Critical Short-Term Silver Price Trend: Put Into Perspective

The current silver price trend is once again at a critical juncture. It has been four years since the price of silver crossed an important trend line. However, the present setup will result in either another correction lower, or a much higher price.

This is a ten-year chart which shows the current trading setup for silver:

The blue line represents the 50 month moving average,and the red line, the 200 month moving average. Since the price of silver fell below the blue line at the beginning of 2013, its support has been the red line. It did not fall below the red line at its low in the beginning of 2016 and has bounced twice off the blue line, which is now acting as resistance by traders.

Currently, the silver price is hitting up against the 200 month moving average blue resistance line. If the silver price breaks above and closes above it, we could see a much higher silver price. However, if does not, then we could experience another short-term correction.

Looking at the current silver COT REPORT, there is a record commercial short position against silver. The Commercial short positions are from the large bullion banks:

The red lines at the bottom of the chart represent the total Commercial net short positions in silver. As we can see, it is at a record high. This high Commercial net short silver position normally means the silver price will likely head lower…. over the short term.

That being said, I have become less concerned about the SHORT-TERM silver price movement. While some investors are able to trade and make money trading silver, I am not one of them. My focus on silver is to hold onto it for the LONGER-TERM. Short term silver price movements are not a concern when we focus on the disintegrating energy and economic fundamentals.

Some precious metals investors have become frustrated or complacent due to the low silver price. This is understandable because some may have purchased silver at a higher price and feel as if they made the wrong investment decision. However, acquiring physical silver should be done over a period of time and be held as a SAFE HAVEN for the future…. just like any other retirement plan.