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SLV’s Bullish Breakout Above 13-Year Resistance Line

  • SLV formed a bullish breakout above the red trendline, which has been a 13-year resistance level.
  • The key price targets on the way up are $27.31, $33.77, and $40.34.

Silver Price Update

On April 10, 2024, the price of silver opened at $28.01 per ounce, marking a slight decrease of 0.29% from the previous day. Despite this daily fluctuation, silver has seen a significant uptick of 17.06% since the start of the year. Throughout the past 24 hours, silver prices have varied, reaching a low of $27.62 and peaking at $28.33 per ounce.

Understanding Silver’s Spot Price
The spot price of silver, which is the current price at which it can be bought or sold for immediate delivery, contrasts with future prices that predict the cost for future delivery. Silver trades globally around the clock, causing its price to continuously change. This trading is reflected in the foreign exchange market as XAG/USD, representing the value of one ounce of silver in U.S. dollars.

Central Banks’ Influence on Silver Prices
Central banks, notably led by China, have been purchasing gold and silver to diversify their reserves away from the U.S. dollar amidst geopolitical uncertainties. For example, the People’s Bank of China has added 160,000 ounces to its reserves, now totaling 72.74 million troy ounces of gold, which has a correlative effect on silver markets due to the intertwined nature of precious metals trading.

The Gold/Silver Ratio
An essential metric in the trading world, the gold/silver ratio, currently stands at 83.49. This ratio, which calculates the price of an ounce of gold divided by the price of an ounce of silver, helps investors gauge the relative value of these metals. A high ratio suggests gold’s premium over silver, hinting at economic uncertainty or a stronger market preference for gold.

Historical Fluctuations in Silver Prices
The value of silver has experienced notable volatility over the decades. From less than $10 per ounce in the mid-1970s to over $49 in 1980, silver prices have seen dramatic rises and falls. The price nearly doubled in March 2008, around the time of the Great Recession, before falling and then climbing again to above $45 in April 2011. These fluctuations highlight silver’s sensitive reaction to economic indicators, market speculation, and global events.

Investing in Silver
Investors can approach silver in multiple ways, including direct ownership of bullion, investing in exchange-traded products (ETPs), or trading futures contracts. Each method offers different benefits and considerations, from the tangibility and storage requirements of bullion to the liquidity and potential tracking errors of ETPs, to the high volatility of futures.

Is Silver a Wise Investment?
Determining whether silver is a suitable investment hinges on an individual’s financial goals, risk appetite, and market understanding. While silver can diversify a portfolio, it comes with its challenges, such as potential long periods of negative or flat returns and its high volatility.

Silver’s Rarity
Despite silver being more abundant in the Earth’s crust than gold—with 75 parts per billion compared to gold’s four—its economic and cultural value remain significant due to its industrial applications and historical importance as a monetary metal.

In conclusion, the current trends in silver prices reflect a complex interplay of economic expectations, central bank activities, and market sentiment. As with any investment, prospective silver investors should conduct thorough research and consider their financial objectives and tolerance for risk.

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