Wednesday, November 9, 2011

Silver - Sideways

Gold is on an uptrend, but Silver is going sideways.  The speculators in the Silver market over the past year should be skeptical because of the sell-off / manipulation in May and September.  Why should someone invest in Silver when it is tied to industrial demand and the worldwide economy is barely holding on. Add the bullion bank manipulation to cover short positions and you do not know what is going to happen day to day.

OK, so with all of the negatives out of the way, Silver is still being scooped up by investors worldwide. The physical market is shrinking as more people wake up to what governments and central banks are doing.  It's going to be one rollercoaster of a ride for the next few years in Silver so hold onto the reins.

Daily chart of Silver from late July 2011 (Thinkorswim platform).  A fib is drawn from the low in late 2010 to the peak in April 2011. Silver is at the 38.2% fib retracement / resistance level.  Add the 50 day moving average and we have sideways action. If (when) it rises above ~35.29, the next potential target level is $38.11 or a 50% retracement of the massive run-up last fall/spring.

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