Silver Price Hovers; Which Way Is It Headed?

It’s been a rocky road for silver thus far in May, but as we approach the end of the month, this week in silver prices has looked relatively stable. The precious metal climbed to a May high to kick off the week, finishing in the lower $17 per troy ounce range. Currently, silver has held on to that price without moving much throughout the week, even as stocks push onward to potential new highs. What does this mean for the price of silver, and might we anticipate big movement before the month is out?

Is Silver Above An Important Price?

Last week DailyFX.com put out an article on silver’s price that suggested anything below $17.03 per troy ounce could be “bearish” for the metal. We’ve since moved above that point for silver, and its current hovering in the low $17’s might suggest that this marker was indeed accurate. But will silver slip ever lower this week as stocks look optimistic? And can we even rely on stocks to hold that pattern?

With the Dow Jones Industrial Average flirting with 21,000 yet again, it’s clear that this week has put some downward pressure on the recent recuperation of gold and silver prices. As stocks look optimistic, so-called “hedge” investments like silver and gold often take a backseat. But each metal is showing some resistance to this downward pressure, which might prove optimistic for silver’s price if stocks take another downward swing. Either way, it’s clear that the $17-flat mark for silver is an important one, psychologically or otherwise.

Keeping An Eye On The Silver Price

Most remarkable about this week in silver news? Just how little there is. Although we’re only approaching the half-way point, monitoring silver prices shows that silver has hovered relatively steady for the past few days after a spike to kick off the week. But there is a possibility that this is the calm before the storm, as silver prices have been over $18 as recently as April. Silver has not even moved halfway back to its April highs from its recent May lows, which suggests that there may be plenty of room for movement. But an overall lack of economic headlines—aside from stocks performing well—has shown that silver may be waiting for bigger and better things.

Projecting The Strength Of The U.S. Dollar Index

It’s important to look at the strength of the U.S. dollar, in which silver is denominated, to better understand the potential for silver to rise or fall in the coming weeks. It shouldn’t be surprising to anyone that the dollar has also been relatively stable this week, first starting a bit lower on Monday and hovering just under the 97.5 point late Tuesday and early Wednesday. This correlates strongly with what we’re seeing out of silver.

This suggests, as is often the case, that watching the dollar will be vital in understanding where the price of silver is headed. For now, the “hover” seems to remain in place. Whether that will remain for the week, the month, or even the quarter—that much remains to be seen.