NEW YORK (Scrap Register): Gold is not the only precious metal seeing a strong start in 2019. Optimism in silver is building as prices hold near their highest levels in almost six months.
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said that continued financial market volatility and a weaker U.S. dollar should continue to support silver prices.
In a report, McGlone described silver's weakness in the second half of last year as a “failed bear-market raid.” However, he added silver’s resilience in the face of extreme weakness could mark a long-term bottom for the precious metal as buying momentum picks up.
He added that the critical level investors should keep an eye is $16.35 an ounce, which represents a long-term resistance level. His comments come as March silver futures last traded at $15.785 an ounce, up 0.46% on the day.
“Silver is poised in 2019 to move above a resistance level that has held the market in check for three years, in our view,” he said. “A primary companion of higher silver prices -- a weakening dollar -- is likely to join the recovery in gold and industrial-metals prices.”
McGlone isn’t alone in his bullish outlook for silver. Ira Epstein, director of the Ira Epstein Division of Linn & Associates, Inc., also said that he is bullish on the metal in a note to clients.
Epstein said that he sees a potential for silver to move higher through the year as it looks like the Fed will scale back its monetary policy tightening.
“As I see it, silver is now in an uptrend. Long positions are now warranted and should be held to as long as prices don’t close back under the 18-day moving average,” he said.
Epstein said that he is looking for initial resistance at $15.955 but added that with its current momentum, it has room to run to $17 an ounce.