Why Silver Prices Could Crash Soon if They Don’t Break Out of This Range

silver-coin-1421959-640x480From Taki Tsaklanos: with silver prices at a critical juncture, we’ll soon get confirmation of whether the metal is in a cyclical bull market or a secular bear market.

Silver has acted very strong in 2016. However, silver miners have been the real deal.

We observe some potentially concerning facts when it comes to the metals. First and foremost, the whole world is favoring precious metals, which is, from a sentiment point of view, a red flag.

From a chart perspective, we see that silver has reached an incredibly important area right. It is no surprise that three trendlines of secular importance coincide within that area.

We consider this the real ‘make or break level’ for silver, say the decision point of a bull market vs a bear market. In other words, if silver will be able to overcome this area, we have a confirmed signal that silver is in a sustained bull market. Otherwise not.

Given overly enthusiastic media and investors, as well as the chart setup, we believe there is a small chance that silver will go higher from here. That is a forecast, not a fact though. We keep on looking at the precious metals space with an open mind, but the odds do not favor a continuation of silver’s price rally, on the contrary.

The iShares Silver Trust ETF (NYSE:SLV) was mostly flat in premarket trading Tuesday at $18.73 per share. The largest ETF that tracks the price of silver has gained 42% year-to-date, but prices are still well off their all-time high of $46.90 set in April 2011.


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