After bouncing back in late October and early November silver has fallen sharply in the last couple of weeks. As a result, we now have what looks like an excellent silver buy zone. Here’s a look at a few silver charts showing why…
The Big Picture NZD Silver: 3 Major Trends Since 2005
Looking back to 2008, silver has seen 3 major trends.
- In the lead up to, and then also just following the financial crisis, silver in New Zealand dollars rose.
- But then silver fell from 2011 through to 2015.
- Since 2015 silver has been quietly moving higher without many people noticing.
Zoom In: Daily Chart From 2015 to 2018
Let’s zoom in on the chart to the period since 2015 and see if we look to be in a silver buy zone currently. Below is a daily chart of silver in NZ Dollars.
Silver has dipped quite sharply in the past couple of weeks. It is now at a new low for 2018 just above $20.
NZD silver is also pretty much back down to the rising trend line dating back to the late 2014 lows.
On top of this, the RSI overbought/oversold indicator is now well into oversold region below 30.If you look back at previous times the RSI was below 30, you’ll notice this is where we often see lows in price reached.
See this for more on understanding technical analysis terms: Gold and Silver Technical Analysis: The Ultimate Beginners Guide >>
Weekly Silver Chart
Next below we have a weekly price chart. This plots the closing price of silver every Friday and is helpful in smoothing out the day to day movements.
We can see that on a weekly price basis, silver is also very close to touching the rising uptrend line. So NZD silver also looks to be at or close to a bottom on the weekly chart.
Monthly NZD Silver Chart
Finally we have a monthly NZD silver chart. This monthly chart plots the closing price of silver at the end of each month (November shows month to date closing price).
The monthly chart really smooths out the short term noise in the silver price.
We can see that on a monthly basis silver also sits pretty close to the uptrend line,. Another sign that silver in NZ dollars may well be bottoming.
Silver Looks to be an Excellent Buy Zone
Silver in NZ Dollars looks pretty close to forming a bottom. The current price is not far from the late 2016 low just above $20. Or from the intraday low just below $20 from July 2017. Along with the RSI indicator being well into oversold territory and therefore due to bounce. So it would seem there should be very limited downside from here.
All the above charts seem to be indicating silver is in an excellent buy zone right now.
A Weakening NZ Dollar May Also Give NZD Silver a Boost
Also the New Zealand Dollar, after bouncing quiet sharply in early November, looks to be turning lower at the moment. Despite pulling back around 1 cent the past week, the RSI (blue circle) is still in overbought territory. So if the NZ dollar weakens further to 0.66, or even 0.65, that will give local silver prices a boost higher too.
But be careful about trying to time an exact bottom in silver. This can lead to paralysis by analysis and trying to second guess whether the price will go lower from here. Leaving you sitting on the sideline as the price moves higher.
If you’ve been looking to buy silver this is likely to be a pretty good area to get a foot hold.
If in doubt consider taking an initial position, but keeping some funds in hand for another purchase of silver if the price fell further.
To learn more about when to buy gold or silver check out this article: When to Buy Gold or Silver: The Ultimate Guide
Editors Note: This post was originally published on 24 July 2018. Updated 13 November to include latest charts.