Silver Loses Its Mettle – Part 2 (Technicals)

RE: SILVER LOSES ITS METTLE 

Last week I talked about unrealistic expectations for the price of silver (see Silver Loses Its Mettle). My comments were centered on two specific factors: 1) silver’s primary role as an industrial commodity and 2) the fallacy of the gold-to-silver ratio.

Both of these items have their root in fundamentals, or lack of them.

In addition, I pointed out the fact that the price of silver has declined significantly in every single recession of the past fifty years.

Not surprisingly, the technical side appears to reinforce the lack of fundamental support for higher silver prices.

Below is a one year chart of silver prices (SLV – iShares Silver Trust ETF)…

As you can see, SLV has made consistently lower lows over the past seven months.  Last month’s plunge of fourteen percent to a new seven-month low came after a similar percentage de cline in stocks that was supposed to take silver to new highs – not new lows.

The next chart is also of SLV. This one shows price action for the past four years…

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Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!