It was another week of
#silver testing $48 support. The
#backwardation remains. It’s a
#RedFlag telling us there is insufficient supply to meet the needs of companies using physical metal to operate their business - solar, electronics, jewellery, etc. A normal market can only return with 1) falling
#demand but that's not happening because companies needing silver are not going to stop operating, or 2) higher
#supply but mines can’t meaningfully increase production in the short-term nor can physical metal be conjured ‘out of thin air’. Therefore, to increase supply so businesses can keep operating, higher prices are needed to entice holders of physical silver to exchange it for fiat currency (not a good choice to make when silver is backward dated & undervalued at these prices). So expect higher prices eventually but probably more testing of $48 this week, which I expect will hold like it did at $28, the last resistance level. This $28 price held silver back for nearly 5 years. When silver finally broke above $28 in Apr 2024, it traded sideways for 5 months. In Sep 2024 silver finally hurdled & stayed above $28 on its run exceeding $48 (red line on the chart). It's now traded above $48 for a month, dissipating a lot of spec interest that had built up. Given that anything is possible, silver may trade sideways for more weeks (months?) just like it did after breaking the $28 level. Or it may trade lower if the supply/demand equation is resolved at lower prices, which appears a low probability. So I remain long-term bullish.