Atfter 11 years of bearish VWAP trends in silver... it has turned bullish and is testing. Silver is interesting as we sit in this "inflationary" environment. I say "inflationary" with quotes as we have a CRB index rising WITH the DXY. This hasn't occurred since the early 1970's and points more towards a supply issue vs. a monetary problem. Hence we see things like food and oil scream higher while metals have been lagging. This bullish turn on the VWAP in silver could be pointing a change in the metals' action in the medium term though. A confirmation would require a break and hold above the highest VWAP, which failed and failed hard in April. I was much more confident in a break out where we failed and was wrong... yet this setup still has strength behind it. If price gets back above the upper VWAP I will be keeping a close eye on metals into the fall.
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Silver remains a conundrum for the smartest of folks... a whistleblower has testified against market manipulation in metals recently, but it did nothing for price. This sucker combined with a roaring US dollar is screaming deflation. There's definitely inflation in most commodities, but it seems due to supply constraints and not an over supply of currency... IF we are headed for a monster deflation cycle, that is the worst case scenario for everything.
This is the bottom of the VWAP band though... it could hold. I hope it does, I'm long calls.
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Hard to get upside in metals when you have a US dollar chart like this one... this is VERY DEflationary kids. I don't care how much they printed.
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DXY paused, UN putting pressure on central banks to ease the rate of tightening, Credit Suisse default swaps continue to march higher, geopolitical tensions getting tighter.... silver up 9,1% on the day. This second push off these lows here at the bottom of the weekly VWAPs should push a long long way. If it blows through the weekly 200 which are right at the highs of today that should confirm a trend change. There are some who say silver price has been suppressed for well over 100 years. I can't validate that, but if it's true... we could potentially see unthinkable prices.
Any recent thoughts on silver with a break out above the VWAP?
HumbleFutures
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@mtb1980, apologies for the delay in getting back to you. This is definitely a test area and looks to be a make or break zone. It has super strong support at $21.265 on the continuous contract. Another push to break $22.56 should give it significant momentum to the upside. It will likely chop and churn on the way up. But another break higher here looks very very bullish. A fail here though and would not be a good sign... at.all.