Our advanced Fibonacci price modeling system is suggesting that the current Silver rally may be nearing a point where the price will pause and retrace a bit before advancing further. The incredible breakout rally over the past few weeks in Silver was a real surprise for many investors. The sleepy shiny metal that everyone thought was dormant broke well above the $15.50 level on huge volume and continued to rally to levels near $16.65.
We published some incredible research regarding the longer-term potential for precious metals – specifically the potential for Silver as the Gold/Silver ratio continues to decline. Please take a minute to read this research post PART I.
We believe the upside potential for Silver is, at a minimum, targeting $26 to $34 for an immediate upside price objective. Overall, longer-term, we believe Silver could rally well above $50 as the Gold/Silver ratio falls to levels below 65.
This Daily Silver chart highlights our Fibonacci price modeling system and shows you that price has already reached the upside price objectives for this current expansion leg. Sometimes price may rally beyond these levels (in extreme trending), but we believe the recent pause in the rally suggests the price will rotate lower (to levels near $16) before attempting another upside rally leg. We’ve highlighted what we believe will happen with arrows on the chart and we believe the next leg higher will align closer to the early August time-frame.
This Weekly Silver chart also highlights our Fibonacci price modeling system, yet it shows the longer-term price modeling results. Overall, the CYAN level, near $16.65, is acting as our first level of moderate price resistance. We believe the support from the previous price peak, drawn as a MAGENTA LINE, will act as support and price will rotate between current levels and this support level before forming a momentum base and attempting to move higher – targeting the $18 to $18.50 level.
Take advantage of this price rotation before the next move higher. Silver is extremely undervalued in comparison to Gold. Any reversion of the Gold/Silver ratio, which is already taking place, will mean that Silver will rally 30% to 60% faster than Gold rallies. This will happen because the disparity in price between Gold and Silver has reached an extreme level. As precious metals rally, this disparity level decreases. Silver moves higher much quicker because it continues to be extremely undervalued compared to Gold and is more affordable nicknamed “poor man’s gold”.
There are dozens of great trades setting up right now in preparation for the August 19 price peak/price rotation that we predicted months ago. The markets are setting up for some really big swing trades and we urge all traders/investors to be prepared for these moves by joining my Wealth Building Newsletter
If you want to see 5 other crucial warning signs about the US markets topping and the pending gold and silver bull market just take a look at this short video and charts.