Silver has been in a trading range since the last drop and announcement of the 'twist' program from the Federal Reserve. It's currently trading under the short, mid and long term moving averages which is technically bearish.
You can see the 3 trading ranges indicated with the boxes since the Comex margin increases last May. Fundamentally, Silver should break towards the upside with the debt issues in both Europe and the US. But as well all know, the spot price is derived from the futures market and the individuals with the most money sets the prices in the short / mid term.
Bottom line is that it is very hard to determine which way it will break after this consolidation period. Investors may have to wait until January to find out.
You can see the 3 trading ranges indicated with the boxes since the Comex margin increases last May. Fundamentally, Silver should break towards the upside with the debt issues in both Europe and the US. But as well all know, the spot price is derived from the futures market and the individuals with the most money sets the prices in the short / mid term.
Bottom line is that it is very hard to determine which way it will break after this consolidation period. Investors may have to wait until January to find out.
I know a little better the gold market but I do not really know the silver market. Is that like all the raw materials we can assume that 2012 will be a good year for silver? Is the work is more or less variable than that of gold? What is important to monitor?
ReplyDeleteHi, watch the Gold Silver ratio, it is currently around 52:1. It takes 52 ounces of Silver to purchase 1 ounce of Gold. Many 'gurus' believe that this ratio will go under 20:1 near the end of the PM bull market. If Gold should go to $5000, a 20:1 ratio would place Silver at $250 an ounce. If you do the math, Silver will have much better gains than Gold, the downside is that it is volatile.
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