After a brutal month for silver, where it dropped almost 50% at one point, we are finally seeing it gaining back some strength. Since the 18th of February, it has already gained a significant 26% and it's looking like it might gain some more soon.
This move has been backed by gold, which started recovering immediately after the crash in late January. Investors didn’t stop buying gold because it crashed, they saw it as an opportunity to buy at cheaper prices, and that's exactly what they did. Gold started slowly recovering while silver was lagging behind, but not for long. By mid February it stopped falling and just started gaining from there.
Another factor might be the US dollar. Many foreign investors don’t see the US dollar as such a strong safe haven currently, and while they wait for it to cool down, they looked towards gold and silver, gold first and silver second. Earlier in the month it looked like the dollar is strengthening, but it quickly fell again and investors came back to silver.
Now, this can't go on forever, eventually a new currency will step in if the US dollar does not start recovering soon. But what does this mean for silver?
Finding a new reserve currency doesn’t just happen overnight, investors need to do thorough research on the country of that currency, and it needs a stable economy. More than likely, there will be a hope that the new currency has less ties to the politics of that country, because with the US dollar, politics play a huge role in its stability and confidence.
While investors look for a new reserve currency, they will still be on the lookout for what is happening with the US dollar. In the meantime, silver will remain an option for investors to buy into. If this happens for a long enough period, then within a few months we might see silver make new all time highs again. A good sign for this would be to be on the lookout for gold, if it keeps making higher highs, then more than likely silver will follow right behind and make new highs as well.
Historically, we've seen that Bitcoin and Gold move in opposite directions, so you can definitely use Bitcoin as another indicator. If you see it is starting to regain strength along with the dollar, then you will probably not see gold and silver hold their strength.
(Just my opinion, not financial advice)