Picking up silver at a lower price

23 January 2023 63
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Silver has been moving in a flat for the past few weeks without any clear upward or downward trend. Still, almost all analysts consider the outlook for silver to be positive. If there is a corrective decline in prices, then the number of bulls willing to build up their positions could increase substantially.

Expectations for silver price surge are based primarily on rising demand from industries. For instance, the Australian ANZ Bank gave a positive outlook for silver in 2023. The bank economists believe that despite the current price correction, silver is likely to retain support from fundamentals going forward. The supply-demand balance for the precious metal seems to be stable. The surge in demand is driven mostly by the introduction of clean energy sources.

In fact, silver is a critical component for the production of solar panels. The metal is also actively used in hybrid and electric vehicles. The development of these industrial sectors will increase the demand for silver, while the growth of production is a complex and long-term process. A skew of the market balance in favor of demand due to the low liquidity of the silver market (compared to the gold one) may trigger a significant rise in prices.

AllStarCharts.com founder and CEO J.C. Parets believes that instead of investing in the high-risk stock market, market players should focus on the precious metals sector. Parets shares the optimism about silver, as he is also bullish in the gold market. If gold performs well, silver is likely to perform even better, and it works both sides, according to the CEO.

It’s worth keeping an eye on silver, especially when it moves closer to the lower border of the flat, i.e. to the range of 23.4. Selling is possible in case the price overcomes the level of 24. The strategy is viable until a breakdown of one of the borders of the flat is recorded, and a new directional trend is formed.

The following trading option can be suggested:

Buy silver in the range of 23.5-23.7. Take profit 1 – 24. Take profit 2 – 24.2. Stop loss – 23.2.

Traders may also use Trailing stop instead of a fixed Stop loss at their discretion.

This content is for informational purposes only and is not intended to be investing advice.

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