The question every investor faces in a bull market is: Do I buy now, anticipating prices will continue higher — and chance getting clobbered if a correction arrives? Or do I wait for a pullback and possibly miss out on big gains? There’s risk either way.
Whilst we must remain patient and disciplined to avoid chasing silver, we must also be aware of when to accumulate the best silver prices to make profitable trades.
Right now the silver price, which at US $18.76, is less than half of its high of $48 an ounce in 2011, could be set for a rebound.
With RSI below 30% on the day charts, it suggests that selling pressure is becoming exhausted, and according to the seasonal pattern, is likely to hit the year’s bottom in the weeks ahead. Last June saw RSI dip below 30%, before silver rallied from $18.20 to $25 an ounce by August. Chances are high that a rally will ensue in the months ahead.
A research report out today from ETF Securities, a London-based investment firm focused on exchange-traded funds and commodities, cites the fact that in the Q1 of 2014 Chinese demand showed a 22% year-on-year increase in silver imports, the largest quarterly gain since Q2 of 2010. In addition, demand from China was up 17% year-on-year.
The report also argues that with industrial demand increasing, supply falling and inventories declining, the gold price stable and price volatility at a decade low, conditions are building for a silver price rally.
In a recent interview with Every Investor, global investor Jim Rogers also highlighted the attractiveness of silver, when he said: “I do own silver. If I had to buy one, gold or silver today I would probably buy silver, only because it is down more on an historic basis. Silver is down 60% from its all-time high, gold is down much less.”
For those looking to accumulate silver at the best prices, we could about to see the best time to do so.
Looking back after this bull market has finally run its course, we think silver will have amply rewarded those who bought smart, had meaningful exposure, and stayed the course.