



Silver prices are surging past these thresholds. It could be a warning.
Subscribe to enjoy similar stories. Silver prices are surging to multiyear highs, but they are also flashing a warning signal for silver investors. The price of silver as tracked by the iShares Silver Trust closed at $59.32 on Thursday, which is 22.6% higher than its 50-day moving average.
On Wednesday, it was 25.3% above that threshold, according to Dow Jones Market Data. The price was 59.9% higher than the 200-day average of $37.11 on Thursday after jumping to 63% above that threshold on Wednesday. Sundial Capital Research called the level of deviation from these thresholds “historic" and a potential signal that a reversal is coming.
A similar dynamic occurred in August 2020, after which silver prices fell 21.9% in subsequent months. The last time before now that conditions were so extreme was in April 2011, after which prices plummeted as much as 25.8% in the following months, the Sundial analysts said in a research note. Silver prices “remained deeply in the red a year later (-29.6%)." Silver prices have more than doubled this year, from $26.93 on Jan.
2. Sundial wrote that the silver market is caught in “an intense tug of war between short-term momentum and long-term gravity." Trades or investments that can result in potentially catastrophic losses are called widow-makers in financial markets. “Silver has long been know as the ‘widowmaker,’ similar to natural gas," the analysts wrote.
Read on livemint.com