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| 5 kg Silver bar (Photo credit: Wikipedia) |
One possible set of signals to predict the low silver price was proposed by Rahool of the Altinvestorshangout. His idea was that the value of the USD Index and the yield of TIPS could signal when silver has bottomed.
...a USD Index level of 89 and a 10-Year Treasury Inflation Indexed Security, Constant Maturity at 2 percent will signal the price bottom for gold and silver.Another interesting idea was proposed by Don Harrold to use the SLV as a proxy for the silver price and look for a double bottom in the RSI as a buy signal.
More recently BrotherJohnF advocated using the Directional Movement Index (DMI) as a counter-trend indicator to predict when the price of silver was going to rebound higher.
A number of individuals have offered their predictions as to the future price of silver:
- Peter L Brandt: $16.15
- Don Harrold: $17.50
- Chris Marchese: $17.50
- Louise Yamada: $14.00-$15.00
These price predictions, as a whole, point for the price of silver per ounce to fall before resuming its upward climb. This does not seem unreasonable given that markets often seem to overreact both to the upside and the downside. In 2011, the precious metals got overextended to the upside, and subsequently are now overextended to the downside.
Rick Rule, in an interview in late June, expressed that he believed that mining stocks had entered the capitulation phase where investors are throwing up their hands and giving up on them.
Likewise, it seems, the physical silver market is reaching a stage where many have given up. A push to new lows for the year could well complete the phase, marking the end of the decline and a resumption of an upward trend in the price of silver.
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