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Why gold's little sister is becoming more attractive

by , 04 May 2020
Why gold's little sister is becoming more attractive
This year, I've been a precious metal bullion.

I've made predictions on gold, platinum and I've sent out 7 trade ideas to Red Hot Storm Trader.

Fortunately, the trades I've made have been correct 5 out of 7 times including:

AGL 47.09%
BIL -27.87%
AGL -46.43%
ANG 82.20%
KIO 50.51%
AGL 103.79%
ANG 50.34%

These resource companies have helped me back a 259% gain for 2020 so far…

But there is one precious metal, that I've been watching and waiting patiently to wake up…

It's one that has been underperforming, and now is time to finally shine again…

I'm talking about gold's baby sister - Silver…

Here's why I expect silver to rally 22% and how I plan to profit from the rise.
Another kind of Gold Prediction
When the Fed cut interest rates – it was GREAT for Silver!
On Sunday, 15 March 2020, the Federal Reserve finally cut the interest rates to zero percent…
They also announced they would purchase $700 billion in bonds and securities to try and stabilise the financial markets amidst the COVID-19 era…
Now when the Fed decides to cut interest rates, this makes it more attractive for traders and investors to pile their money into precious metals like silver and gold…
This is because lower interest rates mean, there’ll be lower returns for investors from savings, banks and even trust funds.
Instead, investors tend to withdraw their money from low yielding assets, and deposit it into more rewarding financial markets.
This means, they’ll more likely invest in safe havens such as gold, silver and even crypto-currencies, which will drive the prices up…
Now going back to why I’m telling you this now…
At the time the silver price was trading at under $13 an ounce…
And as soon as the Fed cut the interest rates, I wrote in my excel note book.
“15 March 2020 - The US has just slashed their interest rates to zero. This means we can expect a rally in gold and silver in the next month or two…”
One month later, the silver price went above $15.00 an ounce.
I know you might think that the rally has happened and that now I’ve missed out on the opportunity... But if you’ve been following my predictions for the last decade you’ll know this…
I never just jump in and pile money into precious metals as soon as an announcement comes out.
Instead, I wait for confirmed upside according to my charts, before I get in and ride the rest of the rally when it comes.
In fact, it looks like this 15% rise is just the start, and I now expect silver to run another 22% in the next few weeks as investors pile into the metal…
Silver will rally because of investors
In the real economy, silver is mainly used in two main industries: jewellery and industrial (electronics, solar panels etc…)
And this year, we’ve seen a huge collapse in consumption as jewellery stores remain closed and mines remain inactive…
With the global slowdown from the COVID-19 pandemic, leading to a drop in industrial silver demand, this most likely will lead to the silver price falling from $18.80 in January down to $12.29 in March…
However, since the interest rates have been cut – there’s been an increase in buying of silver futures and ETFs... In fact, according to the latest research from the Silver Institute, investment demand will drive prices higher in 2020…
Even Commerzbank said retail investors, rather than institutional ones, tend to buy silver and silver ETFs.
“So from this side, there should not be much selling pressure on silver,”
They also mentioned:
“The silver market is small so it doesn’t take a lot of money to really push prices higher,”
And so with silver acting as a precious metal and a safe-haven once again for investors, the charts agree with the upside to come…
Why this Rounding Bottom will send Silver up 22%
Looking at the weekly chart of Silver, we can note two important technical’s…
First, the price has broken above a three-month downtrend. This tells us that the silver price has entered into a bull market (uptrend) which will attract more buying…
Second – Silver has been forming a Rounding Bottom formation (shaded area) since the 1st of March 2020…
It then reached a high at $15.94, forming a level of resistance (ceiling level).
Then last week, the price broke out and above the resistance, which told us that there was a higher investment demand than supply.
As the buying pressure continues to overpower the selling pressure, we can expect the silver price to head further up, which we can calculate its target using the High-Low calculation.
This is a target price calculation I use when it comes to making predictions…
Price target = (High - Low) + High
                 = ($15.94 - $12.28) + $15.94
                 = $19.60
This means, we can expect the price of silver to rally another 22.96%, in the next few weeks…
Wow! Pickpocket Trader is picking winners weekly…
Trader X’s strategy for picking winners is coining it right now.  Seven straight winners in a row since February!
He’s revealing the secrets behind these fast-moving plays in this special presentation which you can preview here.
Here are two ways I’ll profit from the 22.96 % rise in silver
First, I can either buy Silver CFDs and hold them until it hits the target at $19.60.
I will be looking to take trades, through my Red Hot Storm Trader Service, for companies that move up when silver does such as Anglo American, BHP Billiton, Kumba Iron Ore etc…
Trade well,
Timon Rossolimos,
Analyst, Red Hot Storm Trader

Why gold's little sister is becoming more attractive
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