During the second trading session of the month, Silver (COMEX:SI) strikes the $19.165 per Ounce, the highest level since October 2016. During 2019, the precious metal gained 23.8% (YTD). The growing commercial tensions between the United States and China have been expanding the appetite for safe-haven assets. On a similar vein, Gold (COMEX:GC) advances 18.7% during this year.

 

Technical Overview

Silver, on its daily chart, shows a bullish five-wave sequence. The ascending cycle started on November 13, 2018; when the precious metal found support at $13.895 per Ounce. Currently, we could be facing the fifth wave of the bullish cycle.

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Regarding the 4-hour chart, we observe an internal five-wave formation, from where the fifth wave of lesser degree could be ending soon. In consequence, the current movement corresponds to a fifth of a fifth wave.

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As a complement to the previous figures, the Gold/Silver ratio daily chart presents a 5-3-5 corrective formation. In Elliott Wave' terms, the structure corresponds to a zig-zag pattern. Currently, the ratio tests a support zone at 80.81. The bounce of the ratio suggests that a potential retrace on Silver should happen soon.

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From the latest Commitment of Traders (CoT) report, we observe an increment of 7.25% on long positions of institutional traders. On the bearish side, the CoT report informed that short positions were reduced by 12.92%. In summary, the institutional activity released last Friday shows that the bias remains bullish. However, we have to consider that they held 70.34% of the long positions, which suggests that institutions should take their profits soon.

 


 

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