SILVER – 30$ COULD BE JUST AN APPETIZER
Obviously the re-accumulation is done.
XAG
has found its Climax around 14$, played in Phase B for 6 years with an attempt to 21$ thus creating an UpThrust, till “COVID”, where price collapsed to 11$, found “some” buyers that sent price to the opposite direction.
As you can see JAC is obvious ; BU seems to be done as well, bullish divergence confirmed. This “b shape” is clearly identified, with a SOS scenario definitely confirmed, 30$ seems to be just an appetizer.
If we zoom out on a bigger TF, it looks like MM rushed out PA for 6 years before it re-integrated the Fork, kissed the Mid Range (what we called JAC), sitting on the “Preliminary supply” (what we call the UpThrust). What next ?
Little flashback.
2022 was a year of sharp contrasts between silver’s fundamentals and institutional investor attitudes towards the metal; while the silver market saw what may well have been the largest deficit on record,
professional investors were indifferent or bearish for much of the year. This year was not lost for Bears.
https://blacksquare.finance/wp-content/uploads/2023/09/Capture-decran-2023-09-23-210111.png
The downward pressure on silver prices from this further boosted physical demand. This was perhaps most pronounced in India, where on top of already exceptionally strong demand, low prices encouraged the entire supply chain to replenish its stocks. This followed two pandemic-hit years of inventory draw-downs. There were other, price agnostic, drivers of demand growth last
year. Most notable among these was the strength of industrial fabrication, in large part linked to the robust solar industry, but also reflecting a postpandemic
recovery in a number of other markets.
Indeed, were it not for China’s zero-COVID policies, global silver demand would have likely been
even greater than the all-time high of 1,242.4Moz (38,643t) it realized in 2022.
A lack of supply gains was another factor contributing to last year’s deficit. Limited organic growth, project delays and disruptions resulted in a marginal decline in mine production while recycling barely rose.
All this culminated in a 237.7Moz (7,393t) deficit, most likely also an all-time record. (There is some uncertainty, as differences in definitions, coverage and methodology between Metals Focus and past data providers to the Silver Institute complicate comparing balances over the past few decades.)
Importantly, the combined 2021 and 2022 deficits more than offset the cumulative surpluses of the previous 11 years.
https://blacksquare.finance/wp-content/uploads/2023/09/Capture-decran-2023-09-23-210641.png
India
WSS published last year a Changing Landscape of Indian Investment. India was currently the world’s third largest silver physical investment market after the US and Germany. The bar market in particular has been extremely successful, with around 500Moz (16,000t) bought cumulatively over the last 10 years. This partly reflects a lack of other silver investment vehicles, such as ETPs and digital products, both of which are available in the Indian gold market. For instance, digital gold was introduced in 2016, while mutual funds first launched gold ETPs in 2007. That said, the silver investment market is slowly changing, with digital silver and silver ETPs both launched last year. Looking at these themes in more detail, the growing popularity of e-commerce apps has meant that the likes of Amazon and Flipkart have been selling silver bars online, which can be physically delivered. However, holding physical silver comes with space constraints and security issues. To address these points, digital silver was launched by DIGIGOLD and Kredx; more will no doubt follow should their popularity grow. These allow silver to be bought online, and then have it stored in a vault. Once purchased, the silver can be sold directly for cash, or redeemed in physical form. In addition, the ability to invest as little as one rupee, the ease of transacting, transparency, and the ability to buy/sell at any time make it an attractive product. That apart, in 2021 the Securities and Exchange Board of India, the securities and commodities market regulator, allowed the launch of silver ETPs. Although several mutual funds issued silver ETPs, three are active, Aditya Birla Sun Life, Nippon India and ICICI Prudential, with a combined AUM of Rs 6.3bn ($82m) as of February 2022. Silver ETP fund-of-funds (a fund that invests in its own ETP) were also launched by Nippon India and Aditya Birla Sun Life. Other asset management companies have also filed scheme information documents (SIDs) to launch ETPs. Even though these products are relatively new, as retail investors become more comfortable with them and as financial literacy improves, we expect such products to become more popular. Although there will be some market share loss for bar demand (religious motives drive coin purchases), ultimately, we expect total Indian silver investment to grow.
Russia-Ukraine
Among the key drivers of the silver price in 2022 was the jump in geopolitical concerns following the start of the Russia-Ukraine SMO. This in turn exacerbated inflationary pressures as commodity prices soared, particularly in the energy complex. Likewise Cryptoassets, precious metals investment continued to benefit from nominal rates still being low and real rates negative at the beginning of the year. This, combined with worries about stagflation or even a recession, kept price expectations positive and in turn encouraged retail investors to buy hard assets including physical silver. The steep decline in LBMA silver stocks, along with the phenomenal jump in Indian silver imports, also gained much attention last year, contributing to the positive retail sentiment.
The outbreak of the Russia-Ukraine issue in early 2022 initially benefited both gold and silver; the gold/silver ratio was stable in a 75-80 range for much of Q1. Precious metals came under pressure, however, from late April as aggressive rate hikes by the Fed pushed the US dollar and Treasury yields
higher. This raised the cost of holding precious metals for institutional investors and, with silver’s higher beta, the ratio widened to over 85.
Expectations of sharply higher interest rates in the US were also joined by growing recessionary concerns and this fueled more underperformance by silver, as the metal suffered both as a precious and an industrial commodity. These pressures saw the gold/silver ratio touching 95 by September.
A pullback to back below 80 then emerged towards the end of the year amid expectations that the Fed would slow its pace of rate hikes. Silver underperformed early on in 2023 despite tailwinds from China’s re-opening and the benefit provided to industrial metals as expectations that the Fed would adopt a more dovish stance encouraged investors to buy into gold.
Amid all this, institutional and retail investment sentiment diverged at times during 2022. Geopolitical uncertainties, concerns about growth and inflation, all supported retail interest throughout the year. This was especially true when professional activity weighed on silver, as retail investors, particularly
in North America and Europe, took advantage of ensuing low prices to purchase silver coins and bars, pushing combined sales in these two regions to the highest total in Metals Focus’ series. Indian physical investment saw a stunning recovery after two-years of below par demand, as lower prices and
investment holdings starting the year at a low level led to renewed buying.
https://blacksquare.finance/wp-content/uploads/2023/09/Capture-decran-2023-09-23-213807.png
Mexico – The Catalyst.
Mexico just reported its steepest decline in annual production of silver in 4 years, which is notably worse than during the Covid lockdowns.
Not forget that Mexico is by far the largest producer of the metal in the world today.
The supply of silver remains remarkably constrained, and if this is indeed the beginning of another gold cycle, the metal could be worth multiples of its current price.
Otavio (Tavi) Costa (CRESCAT CAPITAL) confirmed that Gold is about to reach record prices on a monthly basis. If historical correlations matter, it is hard to believe silver won’t follow the same path. That alone would imply a 110% return from its current levels.
Relative to M2 money supply, silver remains one of the cheapest tangible assets in markets today. If the current inflationary issues prove to be structural, we are likely entering a secular bull market for precious metals.
Key Level
If we consider this a failed structure, it is no less that PA is out of the Fork (MarkDown). What we have consider as a BackUp few charts above, could be called a Spring, with a pull back on the MidRange (as luck would have it on 0.618 Fibo18 retracement!) – LPS. And once again, it JAC, plus 3 taps on 0.618.
With the reduce of the volume, could be a Sign of the insistence to break it definitely. Mid Range might be the 1st Target, 50$ the second. 26.9$ (VAH19 might be the Key)
If it happen, the journey still remains long. This is not crypto, this is a commodity. Even if PA has re-integrated the range, it currently trading below the POC20 (23.89$). 26.9$ (VAH) should be broken. This will confirm a definitive exit and here the “Creek” (BU) could be the LPS before take off to 30$.
If it fail with a clear re-integration, it should drop below 20$ to confirm any Bear scenario.
As you can see JAC is obvious ; BU seems to be done as well, bullish divergence confirmed. This “b shape” is clearly identified, with a SOS scenario definitely confirmed, 30$ seems to be just an appetizer.
If we zoom out on a bigger TF, it looks like MM rushed out PA for 6 years before it re-integrated the Fork, kissed the Mid Range (what we called JAC), sitting on the “Preliminary supply” (what we call the UpThrust). What next ?
Little flashback.
2022 was a year of sharp contrasts between silver’s fundamentals and institutional investor attitudes towards the metal; while the silver market saw what may well have been the largest deficit on record,
professional investors were indifferent or bearish for much of the year. This year was not lost for Bears.
https://blacksquare.finance/wp-content/uploads/2023/09/Capture-decran-2023-09-23-210111.png
The downward pressure on silver prices from this further boosted physical demand. This was perhaps most pronounced in India, where on top of already exceptionally strong demand, low prices encouraged the entire supply chain to replenish its stocks. This followed two pandemic-hit years of inventory draw-downs. There were other, price agnostic, drivers of demand growth last
year. Most notable among these was the strength of industrial fabrication, in large part linked to the robust solar industry, but also reflecting a postpandemic
recovery in a number of other markets.
Indeed, were it not for China’s zero-COVID policies, global silver demand would have likely been
even greater than the all-time high of 1,242.4Moz (38,643t) it realized in 2022.
A lack of supply gains was another factor contributing to last year’s deficit. Limited organic growth, project delays and disruptions resulted in a marginal decline in mine production while recycling barely rose.
All this culminated in a 237.7Moz (7,393t) deficit, most likely also an all-time record. (There is some uncertainty, as differences in definitions, coverage and methodology between Metals Focus and past data providers to the Silver Institute complicate comparing balances over the past few decades.)
Importantly, the combined 2021 and 2022 deficits more than offset the cumulative surpluses of the previous 11 years.
https://blacksquare.finance/wp-content/uploads/2023/09/Capture-decran-2023-09-23-210641.png
India
WSS published last year a Changing Landscape of Indian Investment. India was currently the world’s third largest silver physical investment market after the US and Germany. The bar market in particular has been extremely successful, with around 500Moz (16,000t) bought cumulatively over the last 10 years. This partly reflects a lack of other silver investment vehicles, such as ETPs and digital products, both of which are available in the Indian gold market. For instance, digital gold was introduced in 2016, while mutual funds first launched gold ETPs in 2007. That said, the silver investment market is slowly changing, with digital silver and silver ETPs both launched last year. Looking at these themes in more detail, the growing popularity of e-commerce apps has meant that the likes of Amazon and Flipkart have been selling silver bars online, which can be physically delivered. However, holding physical silver comes with space constraints and security issues. To address these points, digital silver was launched by DIGIGOLD and Kredx; more will no doubt follow should their popularity grow. These allow silver to be bought online, and then have it stored in a vault. Once purchased, the silver can be sold directly for cash, or redeemed in physical form. In addition, the ability to invest as little as one rupee, the ease of transacting, transparency, and the ability to buy/sell at any time make it an attractive product. That apart, in 2021 the Securities and Exchange Board of India, the securities and commodities market regulator, allowed the launch of silver ETPs. Although several mutual funds issued silver ETPs, three are active, Aditya Birla Sun Life, Nippon India and ICICI Prudential, with a combined AUM of Rs 6.3bn ($82m) as of February 2022. Silver ETP fund-of-funds (a fund that invests in its own ETP) were also launched by Nippon India and Aditya Birla Sun Life. Other asset management companies have also filed scheme information documents (SIDs) to launch ETPs. Even though these products are relatively new, as retail investors become more comfortable with them and as financial literacy improves, we expect such products to become more popular. Although there will be some market share loss for bar demand (religious motives drive coin purchases), ultimately, we expect total Indian silver investment to grow.
Russia-Ukraine
Among the key drivers of the silver price in 2022 was the jump in geopolitical concerns following the start of the Russia-Ukraine SMO. This in turn exacerbated inflationary pressures as commodity prices soared, particularly in the energy complex. Likewise Cryptoassets, precious metals investment continued to benefit from nominal rates still being low and real rates negative at the beginning of the year. This, combined with worries about stagflation or even a recession, kept price expectations positive and in turn encouraged retail investors to buy hard assets including physical silver. The steep decline in LBMA silver stocks, along with the phenomenal jump in Indian silver imports, also gained much attention last year, contributing to the positive retail sentiment.
The outbreak of the Russia-Ukraine issue in early 2022 initially benefited both gold and silver; the gold/silver ratio was stable in a 75-80 range for much of Q1. Precious metals came under pressure, however, from late April as aggressive rate hikes by the Fed pushed the US dollar and Treasury yields
higher. This raised the cost of holding precious metals for institutional investors and, with silver’s higher beta, the ratio widened to over 85.
Expectations of sharply higher interest rates in the US were also joined by growing recessionary concerns and this fueled more underperformance by silver, as the metal suffered both as a precious and an industrial commodity. These pressures saw the gold/silver ratio touching 95 by September.
A pullback to back below 80 then emerged towards the end of the year amid expectations that the Fed would slow its pace of rate hikes. Silver underperformed early on in 2023 despite tailwinds from China’s re-opening and the benefit provided to industrial metals as expectations that the Fed would adopt a more dovish stance encouraged investors to buy into gold.
Amid all this, institutional and retail investment sentiment diverged at times during 2022. Geopolitical uncertainties, concerns about growth and inflation, all supported retail interest throughout the year. This was especially true when professional activity weighed on silver, as retail investors, particularly
in North America and Europe, took advantage of ensuing low prices to purchase silver coins and bars, pushing combined sales in these two regions to the highest total in Metals Focus’ series. Indian physical investment saw a stunning recovery after two-years of below par demand, as lower prices and
investment holdings starting the year at a low level led to renewed buying.
https://blacksquare.finance/wp-content/uploads/2023/09/Capture-decran-2023-09-23-213807.png
Mexico – The Catalyst.
Mexico just reported its steepest decline in annual production of silver in 4 years, which is notably worse than during the Covid lockdowns.
Not forget that Mexico is by far the largest producer of the metal in the world today.
The supply of silver remains remarkably constrained, and if this is indeed the beginning of another gold cycle, the metal could be worth multiples of its current price.
Otavio (Tavi) Costa (CRESCAT CAPITAL) confirmed that Gold is about to reach record prices on a monthly basis. If historical correlations matter, it is hard to believe silver won’t follow the same path. That alone would imply a 110% return from its current levels.
Relative to M2 money supply, silver remains one of the cheapest tangible assets in markets today. If the current inflationary issues prove to be structural, we are likely entering a secular bull market for precious metals.
Key Level
With the reduce of the volume, could be a Sign of the insistence to break it definitely. Mid Range might be the 1st Target, 50$ the second. 26.9$ (VAH19 might be the Key)
If it happen, the journey still remains long. This is not crypto, this is a commodity. Even if PA has re-integrated the range, it currently trading below the POC20 (23.89$). 26.9$ (VAH) should be broken. This will confirm a definitive exit and here the “Creek” (BU) could be the LPS before take off to 30$.
If it fail with a clear re-integration, it should drop below 20$ to confirm any Bear scenario.
Comment:
LITTLE UPDATE
#COMMODITIES #SETUP
📡🔞 TRADE
XAGUSD
BUY (STOP LONG ) > 22.83$
STOP > 22.73$
T1 > 23.30$ (RR 4.03%)
T2 > 23.84$ (RR 8.86%)
BEWARE THAT THIS IS A STOP LONG ! if it not breaks the level, dangerous to play below the line !!!!
It could take time to take off....
DOUBLE H4 #BLACKSTRAT displayed.
1. is rejected with a wick printed on EQ lows (22.57$)
2. triggered yesterday, same level close as the former one (22.83$).
In case of breaking above this line (22.83$) , it should continue building into the MarkUp
if it failed, Daily #BLACKSTRAT signal highly likely !
#COMMODITIES #SETUP
📡🔞 TRADE
XAGUSD
BUY (STOP LONG ) > 22.83$
STOP > 22.73$
T1 > 23.30$ (RR 4.03%)
T2 > 23.84$ (RR 8.86%)
BEWARE THAT THIS IS A STOP LONG ! if it not breaks the level, dangerous to play below the line !!!!
It could take time to take off....
DOUBLE H4 #BLACKSTRAT displayed.
1. is rejected with a wick printed on EQ lows (22.57$)
2. triggered yesterday, same level close as the former one (22.83$).
In case of breaking above this line (22.83$) , it should continue building into the MarkUp
if it failed, Daily #BLACKSTRAT signal highly likely !
Comment:
UPDATE !
PA is moving in a MarkDown since friday
Except the drop of Monday, it keeps in the same cahnnel with a same "force"
As I announced a potential entry above, I keep this one.
We are out of the MarkDown. BUT it seems to be interesting to monitor if PA will enter back in its initial channel...
PA is moving in a MarkDown since friday
Except the drop of Monday, it keeps in the same cahnnel with a same "force"
As I announced a potential entry above, I keep this one.
We are out of the MarkDown. BUT it seems to be interesting to monitor if PA will enter back in its initial channel...
Trade active:
BUY LIMIT
22.57$
STOP 22.38$
TARGET 1 > 24.16$
TARGET 2 > 25.13$
22.57$
STOP 22.38$
TARGET 1 > 24.16$
TARGET 2 > 25.13$
Trade active:
📡🔞
#COMMODITIES XAG (SILVER) | BUY (LIMIT LONG) > 21.06$
STOP > 20.67$ | T1 > 22.09$ (RR 2.68) | T2 > 23.30$ (RR 5.84)
#COMMODITIES XAG (SILVER) | BUY (LIMIT LONG) > 21.06$
STOP > 20.67$ | T1 > 22.09$ (RR 2.68) | T2 > 23.30$ (RR 5.84)
Trade active:
Working in a FORK ! 3 times on ICE ; 2 on the Creek. Net really UpThrust Action seen. If I take wicks as a part of my Wyckoff,21.38$ would be a SOS signal !
After a drop (23.498$ to 23.06$), we can remark that force has change, with a soft landing.
PA is moving on a "failed structure" (call it a bull flag or MarkDown). EMA 34 is playing "the Wall". ANY Break above the trendline could be a signal.