The last year turned out to be a booming year for silver, and the outrageous upsurge in the metal’s demand broke all previous records. The bullish trend continued throughout the year, and silver touched the record price bar of $20.36 per ounce in 2016. The prices fluctuated around the benchmark of $20 per ounce and emerged as one of the most promising investments in 2016. The increase in prices as well as the demand correlated to make silver stand as a notable investment area, for almost the entire course of 2016.
With two months gone since the start of the year, we have almost arrived at the end of the 1st quarter of 2017. Considering the trends observed in January and February, that clearly indicated that the high tide has started to break, it is now a good time to analyse what the year has in store for the grey metal.
The last month closed at a price of $18.35 per ounce value of silver, with a slight decline of 0.4%. The prices oscillated around and in between the $18.28 and $18.30 medians values. The downward decline from the $20.0ish per ounce values in 2016 to $18.30 this year has started to sweep silver off the overbought charts. However, by holding a Relative Strength Value of 69, silver still manages to sustain it place in the overbought category. The price decline and the RSI value indicate at two sure-tell signs:
- The price upsurge is settling down and the downward momentum may bring the prices of silver to hit a value as low as around $15 per troy ounce.
- The price fall will revoke the interest of the investors. They will be looking forward to a number of factors that will affect the global trends and forecasts, for not just silver but other precious metals too. This might include the key global influencers such as the European equity stocks index, US dollar value and as well as the approach of the new US administration towards the international economy. This implies that the record silver prices as well as the hiked-up demand that uplifted silver to overbought rankings will no longer be observed in 2017.
This deceleration in the prices of silver can better be called as ‘correction’ rather than devaluation or decline. The last year went inarguably well for the metal, but it required no rocket science to predict that the bullish trend was what might as well be rendered as ‘unnatural’. So, having rolled in the glory of cloud 9 for an entire year, 2017 will start to normalise the values.
The ‘price correction’ will pull down 2016’s upward incline, in 2017, influencing the investors to shift their interest. The value fluctuating around a median $18.30 in February 2017 has validated that the acceleration of silver has definitely stalled.
The investors seeking for instant and short-termed returns on silver investment might not be pleased. As for the investor groups aiming to look at the bigger picture and long-term return, this is too early to predict the turn of the tides and we will have to wait for the aforementioned global catalysts to make their move, to envision a future for investment in silver.