Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19
US Corporate Debt Is at Risk of a Flash Crash - 10th Aug 19
EURODOLLAR futures above 2016 highs: FED to cut over 100 bps quickly - 10th Aug 19
Market’s flight-to-safety: Should You Buy Stocks Now? - 10th Aug 19
The Cold, Hard Math Tells Netflix Stock Could Crash 70% - 10th Aug 19
Our Custom Index Charts Suggest Stock Markets Are In For A Wild Ride - 9th Aug 19
Bitcoin Price Triggers Ahead - 9th Aug 19
Walmart Is Coming for Amazon - 9th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Silver to Break Through $20 per Ounce

Commodities / Gold and Silver 2010 Jun 03, 2010 - 08:15 AM GMT

By: Miles_Banner


Best Financial Markets Analysis ArticleGold has stolen the limelight thanks to its bull run which started in the early 2000s. However, our attentions turn to another metal this week, as investors sentiment towards silver is gathering pace, and now is a make or break moment for the versatile metal.

The World Silver Survey released last week by the silver institute, expects the 2008 London high of $20.92 per ounce to be broken in 2010.

GFMS Chairman Philip Klapwijk forecast that the silver price could brake through $20 per ounce and outshine the gold price this year. “Silver’s demand is a function of the economy, not of the price,” said Mr. Klapwijk. “Industrial demand has come back quite strongly this year from a low level. I would imagine we could continue to see this year very strong investment demand.”

Silver was on a bull run of its own up until February 2008. Rising up to $19 an ounce. This rally came to an abrupt halt and investors were burned if they didn’t pull out in time. The correction pulled silver down to $9 an ounce, not traded at since 2006.

Since then silver has been on something of a rally. Surging back up to over $19.50 per ounce in May.

Signs of a silver price surge
Analysing the graph below, which shows a 10 year period for silver, an inverse head and shoulders appears between Jan 2008 to Jan 2010.

An inverted head and shoulders typically notifies investors to go long, with a view that the immediate future is looking promising.

[Note: for a simple explanation of what an inverted head and shoulders is click here]

To grasp what is likely to happen to silver, another metal, platinum, can shed some light. As you can see the graph below shows platinum in 2009 and highlighted is an inverted head and shoulders. From the second peak (right shoulder) the price of platinum rises to just under $1300 per ounce, very close to its head and shoulders target.

Silver investors will be hoping for a similar rally for their metal.

The rally may not materialise, however. The neckline is at a very slight negative angle. With a descending neckline, the likelihood of a breakout is less so. So investors should be cautious.

The silver forecast

The target is the estimated increase in the price according to the inverted head and shoulders. It’s equal to the vertical drop from the neckline to the lowest trough, and is forecast above the neckline as a breakout. For silver, the distance is approximately $10, so using the head and shoulders analysis, we can come to the assumption that silver could increase $10 up to $29 per ounce.

With increasing demand, the World Silver Survey results and our head and shoulders analysis, silver could be in for a prosperous 2010. Our main concern is the descending neckline, which is likely to have investors treading carefully.

To keep ahead of the game on other investments, and to find out the latest on gold delivered straight to your inbox, sign up to our free once a week email service by inputting your email address and clicking submit below.

Gold Price Today

We leave you this week with a fascinating article forwarded to us by one of our readers, James. It’s a Bloomberg story that reveals the insatiable appetite for gold amongst central banks – Central Bank Gold Holdings Expand at Fastest Pace Since 1964

© 2010 Copyright Gold Price Today - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules