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It Is Just A Matter Of Time For Silver

Mar. 01, 2021 5:02 PM ETGlobal X Silver Miners ETF (SIL), SILJ61 Comments


  • A new high leads to price consolidation.
  • Bullish price action over the past year - Silver has not returned to its breakout level.
  • Silver mining shares consolidate - SIL and SILJ in holding patterns.
  • Silver is a sneaky market.
  • Expect fireworks - Sooner rather than later.
  • Looking for more investing ideas like this one? Get them exclusively at Hecht Commodity Report. Get started today »

In my last piece on silver on Seeking Alpha on February 1, I outlined how GameStop (GME) and silver were two peas in a complicated pod. On that day, silver rose to a new high at $30.35 per ounce on the continuous COMEX futures contract. Since then, the price has corrected and has entered a consolidation phase. On last month’s final trading session, the price dropped by $1.245 per ounce to settle at $26.44 on the active month May futures contract. Silver posted a 40 cents per ounce loss in February, while gold fell by over $110.

Silver and gold continue to have a lot going for them in 2021 despite the pullbacks. Central bank liquidity and government stimulus are inflationary seeds that have been blooming all over the commodities market. In February, crude oil, lumber, copper and other base metals, sugar, coffee, soybeans, cotton, and hogs all posted new highs. In some cases, the peaks were levels not seen in years.

At over $26, silver remains well above its critical technical support level at around $21 per ounce. The current level could be the perfect place to consider adding silver mining shares to your portfolio. The Global X Silver Miners ETF (NYSEARCA:SIL) and the ETFMG Prime Junior Silver Miners ETF (NYSEARCA:SILJ) products are likely to outperform the price of silver futures on a percentage basis when the precious metal decides to rise to a new high.

A new high leads to price consolidation

While the continuous COMEX silver futures contract reached a high of $30.35 on February 1, the May contract’s peak was at $30.04 per ounce. Since falling from the high on February 2, May futures have traded in a range between $25.98 and $28.47 per ounce.

Source: CQG

As silver continues to consolidate, the price was trading at

The Hecht Commodity Report is one of the most comprehensive commodities reports available today from a top-ranked author in both commodities, forex, and precious metals. My weekly report covers the market movements of over 20 different commodities and provides bullish, bearish, and neutral calls; directional trading recommendations, and actionable ideas for traders.

This article was written by

Andrew Hecht profile picture
Weekly commodities commentary and calls, from a Wall Street veteran
Andy Hecht is a sought-after commodity and futures trader, an options expert and analyst. He is the #2 ranked author on Seeking Alpha in both the commodities and precious metals categories. He is also the author of the weekly Hecht Commodity Report on Marketplace - the most comprehensive, deep-dive commodities report available on Seeking Alpha.

Andy spent nearly 35 years on Wall Street, including two decades on the trading desk of Phillip Brothers, which became Salomon Brothers and ultimately part of Citigroup.

Over the past two decades, he has researched, structured and executed some of the largest trades ever made, involving massive quantities of precious metals and bulk commodities.

Andy understands the market in a way many traders can’t imagine. He’s booked vessels, armored cars, and trains to transport and store a broad range of commodities. And he’s worked directly with The United Nations and the legendary trading group Phibro.

Today, Andy remains in close contact with sources around the world and his network of traders.

“I have a vast Rolodex of information in my head… so many bull and bear markets. When something happens, I don’t have to think. I just react. History does tend to repeat itself over and over.”

His friends and mentors include highly regarded energy and precious metals traders, supply line specialists and international shipping companies that give him vast insight into the market.

Andy’s writing and analysis are on many market-based websites including CQG. Andy lectures at colleges and Universities. He also contributes to Traders Magazine. He consults for companies involved in producing and consuming commodities. Andy’s first book How to Make Money with Commodities, published by McGraw-Hill was released in 2013 and has received excellent reviews. Andy held a Series 3 and Series 30 license from the National Futures Association and a collaborator and strategist with hedge funds. Andy is the commodity expert for the website about.com and blogs on his own site dynamiccommodities.com. He is a frequent contributor on Stock News- https://stocknews.com/authors/?author=andrew-hecht

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The author always has positions in commodities markets in futures, options, ETF/ETN products, and commodity equities. These long and short positions tend to change on an intraday basis. The author is long silver.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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