Bulls and bears caught in Silver’s wait-and-see pattern
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The current market environment offers plenty of room for both bullish and bearish silver investors.
Given this, what direction should potential silver investors go in? On the one hand, a global economic recovery should lead to higher risk profiles for investors, leading them to dump precious metals and boost stocks.
However, there is always a push-and-pull dynamic in the markets. In the case of silver, falling yields could run counter to the narrative of stronger growth as the economy emerges from the pandemic.
“One feature in the market recently has been falling US Treasury bond yields amid the notion that US and global economic growth has slowed from the accelerating pace emerging from the shackles of the pandemic,” explained an article by Kitco News from Jim Wyckoff. âThis can be carried over to a simpler monetary policy for a longer period of time by the world’s major central banks. In addition to concerns about less robust global economic growth, there is a new burden of Covid-19, which is rising in some parts of the world at the same time. “Time vaccinations have subsided.”
From a technical point of view, there are still no stronger arguments for the self-proclaimed bull or bear.
“The silver bulls and bears are on an overall short-term technical playing field,” added Wyckoff. âThe silver bulls’ next price target is the September futures closing price above solid technical resistance at $ 28.00 an ounce. The next downside target for the bears is to close below solid support at the June low of $ 25.58, high of $ 26.375 and then $ 26.545. The next support is seen at last week’s low of $ 25.82 and then $ 25.58. “
Capturing silver exposure
For investors who see an opportunity to hold silver instead of opting for the physical metal, there is another option: the Sprott Physical Silver Trust (PSLV). PSLV is a closed-end trust that holds unencumbered, fully allocated London Good Delivery silver bars held in the custody of the Royal Canadian Mint.
Shareholders also have the option of returning their shares for physical precious metal anywhere in the world (subject to certain minimum conditions). Such redemptions will not dilute the Trust’s commitment to the remaining Unitholders. PSLV’s expense ratio is 0.62%.
More news, information and strategies can be found on the Gold and silver investment channel.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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