Silver Topping, Here Is Why

In the short run, silver appears to be topping. The iShares Silver Trust (NYSE:SLV) traded as high as $32.68 before pulling back to its current level at $32.20. Silver opened sharply higher on global worries along with gold. The SPDR Gold Trust (NYSE:GLD) opened at $136.92 and has since pulled back as well.  The key to the silver trade being ready to correct is that it is an industrial metal as much as it is a store for safety.

As instability jumps and oil prices rise, GDP all over the globe will take a hit. The higher oil and gas prices go, the bigger hit to growth across the globe. Think of oil prices as a tax on companies and people. This limits their spending thus slowing global growth. The slower global growth, the weaker demand for silver as an industrial metal. In addition, many silver company charts have surged into major double tops. A great example would be Silver Wheaton Corp. (NYSE:SLW). The double top level hit today was $41.85 – $42.35. Silver may not pull back much but could see a fall on the SLV back to $30.00 in the short term.

About Gareth Soloway 168 Articles

Affiliation: InTheMoneyStocks.com

Gareth Soloway has been an avid swing and day trader since his days at Binghamton University where he studied Economics. After college, Gareth quickly excelled as a financial advisor, helping clients get their financial houses in order. While helping others gain financial independence, he continued to study the day trading and swing trading world, developing a unique market philosophy and proprietary methods. Following his work in the financial sector, Gareth went on to trade alongside professional traders. Unable to tolerate the hype of Wall Street any longer and having an amazing ability to profit using his developed techniques, Gareth Soloway decided to partner with his friend and colleague, Nicholas Santiago to form InTheMoneyStocks.com. Chief Market Strategist Gareth Soloway serves as the president and CFO of InTheMoneyStocks.Com.

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