This is a historical chart of silver going back all the way to 1968. The rally of the 1970s happened under the following conditions:
1) Post vietnam war, large amounts of war spending to repay, large amounts of debt
2) Low interest rate environment with tightening monetary policy
3) Falling USD with confidence in the greenback ailing
Compare this to modern 2017 times, except that we are on steroids and play jenga with derivatives.
1) Afghanistan, Libya, Iraq, Syria
2) Lowest ever interest rates, with some central banks in negative territory
3) Donald Trump is trying all he can to drop the USD further
4) Debts at all time highs, no resistance ceilings and clear blue skies for breakouts :)
5) Remains of QE still in the system, leveraged by derivatives in every financial instrument known to mankind
What is my point?
The fundamental conditions are of course not exactly the same, but they share similarities. We were playing with tiger cubs in the 70s and the 'bite' resulted in a 50 times rally from $1 to $50. Rest assured the tigers are fully grown now.
Lets go back to the charts.
It has been reiterated many times over that Silver is heavily manipulated and i buy the idea. That explains why daily charts are messy and breakouts fail more often than they should. So let's zoom out. Take a look at 4 monthly charts.
Silver has a clear basing pattern under $10 formed in the 1980s to the millennium. 2 decades of bottoming out.
The rally of the millennium took it back to the $50 highs followed by consolidation. Look at the pattern of consolidation. Falling wedges are my favorite pattern in chart analysis because they coil up towards the bottom similiar to how one suppresses a spring to the ground; they bounce back with a vengeance.
The first bottom out signal from the millennium correction occured in 2015, followed by another 2 years of flag forming. Another nice bullish continuation pattern. Again, the price is squeezing into a narrow range in preparation for a move up. Signs of selling? Minimal. We had 5 years of selling before that already, its safe to conclude selling is dry. What's an easy test to confirm this? Ask anyone on the street about silver. Pretty much no one cares about silver. The upside target is a test of the historical $50 which will result in a retracement. I expect a shallow pullback just below $50 before a major break out of it.
Let's move into the shorter term analysis.
Silver needs to recapture the 17.30 range which is above the resistance of this current downtrend. Similar to how Gold has been performing in the short term, i have reason to believe Silver will not have much of a difficulty. Stack up and hold strong