Silver has been trading in a range for the past few months.
Fundamental bias: Long term Bullish ; Medium Term Neutral
Just like my previous post for platinum, I am still refining and developing my fundamental analysis for silver for the time being. However, in my opinion thus far, Silver has been generally unaffected by supply demand balances and stock inventories, in my opinion, with the occasioal reaction to an over or undersuply of stocks. It has been more driven by gold prices correlation, yields, overall metals prices, positioning and ultimately the US Dollar. Overall my long term bias for silver is bullish due to the following factors:
1. Upbeat global growth to underpin demand for commodities, including industrial metal.
2. Declining short positions based on COT. Silver Large Spec Short positions are decreasing, while Long positions are increasing.
Technical Bias: Long Term Bullish ; Medium Term Neutral Range
For this trade plan, it is more technically driven than fundamentally driven. For the past few months, with the exception of the April short squeeze, prices have been stuck in a solid range in the midst of higher USD and lower gold prices. The range has provided me with good short term range trades for the past few months, with the occasional stop outs at breakeven.
Therefore, looking forward, I’ll be continuing to trade the range looking for long entries only at range support zone with oversold stochastics and bullish reversal patterns on lower timeframes (H1, M30), and short entries only at range resistance zone with overbought stochastics and bearish reversal patterns on lower timeframes (H1, M30), until the range breaks out.