As November’s second full trading week came to an end last Friday, silver prices were on the rise. But a political crisis in Germany sent silver prices tumbling…
Between Friday, Nov. 10, and Friday, Nov. 17, the metal surged 3% to its highest level in a month. This came on the back of a falling U.S. dollar and declining stock market. The U.S. Dollar Index (DXY) – which measures the dollar against the euro and other prominent currencies – dropped from 93.93 to 93.67 last Friday, while the Dow Jones tumbled 0.4%.
But then the silver price’s 3% gain from last week evaporated in one fell swoop yesterday (Monday, Nov. 19) on geopolitical concerns out of Germany…
That’s where German Chancellor Angela Merkel is having trouble forming a coalition uniting her conservative party with the country’s pro-business Free Democrats and environmentalist Green party. Her failure to unify Germany’s major political parties leaves her potential fourth term as chancellor in doubt.
While these concerns often cause unease among investors, drawing them into silver, the news out of Germany weakened the euro, which only made the dollar more attractive. This pushed the DXY above the 94 level, punishing the price of silver in the process. It fell 3.1% to a two-week low of $16.84 yesterday.
I still think silver prices will rebound from here. The political uncertainty right now should renew safe-haven buying, eventually pushing the metal toward our bullish target by the end of 2017.
Not only will I show you our 2017 target, but I’ll also show you why I think silver could rise more than 180% over the next few years.
First, let’s take a closer look at silver’s 3% gain last week – and subsequent erasure of that gain yesterday…
Silver Prices Rally 3% Last Week (Nov. 10-17)
After closing at $16.87 on Friday, Nov. 10, silver opened back above the $17 level on Monday, Nov. 13. The DXY climbed from 94.39 to 94.52, but even that wasn’t enough to stifle the silver price rally.
It ultimately settled at $17.05 for a 1.1% gain.
The gains continued on Tuesday, Nov. 14, despite the silver price opening below the $17 level, at $16.93. As the DXY fell back below 94 to 93.83, silver jumped to $17.07 by the end of the day for a small 0.1% increase.
On Wednesday, early morning weakness dragged the DXY down to touch 93.50 near the opening bell. But it edged back up throughout the day to close mostly flat, at 93.81. This dragged silver prices 0.6% lower, to close the session at $16.97.
Check out the DXY’s behavior over the past five trading days, especially its attempt at breaking the overhead resistance, at 94, multiple times this past week…