RJO FuturesCast

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Metals

Silver Futures Setting Up Another Big Move Higher

Posted 01/25/2019 8:50AM CT | Frank J. Cholly

Silver futures have been pivoting both sides of the 200-day moving average recently. The 200-day comes in at $15.63 for the May futures contract. Another close above $15.75 will promote a secondary rally driving prices to challenge the $16.00 level. Due to the fact that silver futures are such a volatile contract, I think that the $17.00 price range is not much of a stretch once the $16.00 level is violated. Just look how silver rallied after taking out the $15.00 level. This market is set up, technically, for additional rallies.

We cannot talk about silver and not mention gold. Gold is typically the leader, but we also must look at the price differential. The gold to silver ratio is now 82.3 to 1. When silver finally starts to run, you want to already be on that train. Silver has a lot of catching up to do! A move back to $18.00 is not “crazy” talk. One should consider some intermediate term bull call spreads with low risk and big return potential. If you would like to discuss strategies that use the leverage of futures with low, limited risk options spreads.

Silver May ’19 Weekly Chart

Silver May '19 Weekly Chart

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Frank J. Cholly

Senior Market Strategist
Frank brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.
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