Silver Is Bottoming Out
On November 6 of last year the silver
price ended up at $15.46, a level that we would have never imagined
around $50 at the end of April 2011. It is too soon to call this the
ultimate bottom but, if you look at the chart below, the odds are high
it is.
The silver price is bottoming out
strongly, which would mean that we are at the dawn of a new secular bull
market in silver. At the start of November the silver price hit an
intraday low of $14.66 after which the price rose around the end of
January to $17.61 or 20.5% in 10 weeks’ time.
This is the power of the price of silver
when the trend turns. The correction of the end of January is only
normal after such a strong short-term increase. The move is strengthened
by high volume while the correction happend on low volume.
Physical Silver Supports The Technical Silver Price
The technical increase of the silver
price goes hand in had with a fundamental rise in demand for silver.
India imported 7,063 ton of silver in 2014, an increase of 15% compared
to 2013. In 2014 the US Mint also broke a record in Silver Eagles sales,
good for 44 million ounces. (P.S. January sales in 2015 were also higher than the year before)
Physical Silver Is Becoming Scarce In China
Finally we see a declining amount of
silver on offer on the Shanghai Futures Exchange which underlines that
the demand for silver is greater than the supply. In 2014 supply dropped
by 70 %. The British bank HSBC predicts that the physical silver market
is evolving from a surplus of 3 million ounces in 2014 to a shortage of
11 million ounces in 2015.
