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This Suggests That Silver Will Soon Spike Significantly Higher


 -- Published: Wednesday, 10 August 2016 | Print  | Disqus 

The silver price and the US Dollar/South African Rand exchange rate (USD/ZAR) have a very interesting relationship that goes back a long way.

 

Basically, in the long run, the two move in opposite directions. When the USD/ZAR rate is moving up, then the silver price is moving down, and vice versa. Furthermore, when the USS/ZAR rate is making a top, then a bottom in silver is normally very close (before or after the USD/ZAR peak).

 

Due to the nature of this relationship, I find that the USD/ZAR chart is often a leading indicator for a silver bottom as well as a silver rally.

 

Then – It signalled the bottom

 

Earlier this year, the USD/ZAR chart signalled the fact that the December 2015 low in silver was actually the bottom for the 5-year decline. This, from my February 2016 premium service (in italics):

 

Below, is a comparison showing the relationship between USD/ZAR peaks and silver bottoms:

 

http://goldseek.com/news/2016/8-10hm/image002.jpg

 

On the chart (from tradingview.com), I have drawn blue lines at the 2001, 2008 and potential Jan 2016 USD/ZAR peaks. One can see how close to these peaks the 2001, 2008 and potential Dec 2015 silver bottoms were.

Given, the look of the Jan 2016 candlestick; it is likely that the USD/ZAR chart has peaked.

If it has indeed peaked, then there is a very strong likelihood that the December 2015 bottom in silver is actually the bottom since the 2011 peak. It is interesting to note that there is a 7-year interval between the silver bottoms.

Now - it signals a rally similar to that of August 2010 – April 2011

 

Below is a USD/ZAR chart from 2004 to 2016 (from tradingview.com):

 

http://goldseek.com/news/2016/8-10hm/image004.jpg

 

On the chart, I have marked two significant peaks (October 2008 and January 2016). Silver also made a significant bottom around the same time during both peaks. The USD/ZAR had a significant breakdown in July of 2010 as indicated. This was followed by a significant silver rally that really  took off around the end of August 2010.

 

The USD/ZAR chart recently had a similar breakdown as indicated. This tells me that silver will soon spike significantly higher. This fractal analysis of a previous article also suggests that silver is close to a significant spike.

 

Warm regards,

 

Hubert

 

https://hubertmoolman.wordpress.com/

 

 

 

 


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 -- Published: Wednesday, 10 August 2016 | E-Mail  | Print  | Source: GoldSeek.com

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