Silver price crash and bull market correction

The bull is tired of charging all the way.

It seems that silver price crash is going to happen.

Before we talk about the effect of silver price crash, let us take a look at the 2011 silver price data.

Silver price at the start of 2011 was just $30.67.

It hit an all time low for the year 2011 on 28 January at the price of $26.68.

That was the date I would remember forever.

My instinct told me to buy more silver bars, but I hesitate, thinking that lower price would come later.

I have been kicking myself since then.

The recent bull run started after 28 January, when silver price increased at an average of a dollar every 3 or 4 trading day.

The bull run accumulated to an all time high of $49.31 on Monday, before posting the largest one day loss on Tuesday.

The highest ever record for silver was $49.48.  That occurred way back in 1980 due to speculation effort on the part of a few investors.

The current silver price at the point of writing is $45.70.

Is the silver price crash healthy?

The current silver price crash is more of a bull market correction.

It does not mean the end of the bull run, and a return to bear market.

Bull market correction is usually a short term breather, before the bull run starts again.

That is why I am very positive about the silver price crash.

This means I have the chance to buy more silver before the next bull run brings the silver price above $50.

We have to bear in mind that $49.48 is a psychological barrier.

Once silver manages to overtake the highest ever point of $49.48, the price will take a very long time to come down again.

All the macroeconomic factors favor the continuous bull run.

The US dollar is not going to get stronger in the next few weeks, or the next few months.  The US government needs to devalue the currency.

The Chinese are rushing to buy gold and silver to hedge against the high inflation rate.

The demand is there.  The supply of silver is not going to increase overnight.  There is no way the mines are tripling the production to increase the supply of silver.

Oil price is holding steady, and is not expected to come down.

That is why precious metals such as gold and silver are gaining momentum.

The question is: how bad will silver price crash be?

A normal bull market correction means 20% shed off the price of the peak.  Since silver peaked recently at $49.31, it could drop to $39.45.  It will be a stretch of imagination and will power to force silver to go below that.

Personally I doubt silver will drop below $40.  $40 for silver is a very strong psychological barrier.

That means for the near term, silver is unlikely to break the support level of $40 and sink to $39.  It is also unlikely to break the all time peak of $49.48.

The silver price crash will likely bring silver to $40, before the next bull run brings it to $50 and beyond.

Do not miss out the golden opportunity to acquire more silver.

Buy some 10 oz silver bars if you can afford it. If you cannot, buy a couple of silver coins or 1 oz silver bars.