Although at first sight silver looks short-term toppy, when one takes into
consideration the outlook for gold and the dollar, the action over the past
few weeks is viewed as a healthy period of consolidation, following the strong
advance during the first half of February. Price action on the 2nd of this
month was bullish, revealing significant underlying support, and moving averages
are now in bullish alignment, increasing the likelihood of further significant
gains.
When gold broke strongly higher about 10 days ago, silver didn’t really
join in. This was because it had already risen a lot earlier in the month,
and needed to consolidate those gains, a process that has continued up to the
present.
Another rally to challenge the December highs at about $8 looks increasingly
likely in coming weeks, especially if the dollar breaks below its "neckline" support
at 82 on the index - see Gold Market update to view the dollar chart.
The above represents the opinion and analysis of Mr. Maund,
based on data available to him, at the time of writing. Mr. Maunds opinions
are his own, and are not a recommendation or an offer to buy or sell securities.
No responsibility can be accepted for losses that may result as a consequence
of trading on the basis of this analysis.
Mr. Maund is an independent analyst who receives no compensation
of any kind from any groups, individuals or corporations mentioned in his reports.
As trading and investing in any financial markets may involve serious risk
of loss, Mr. Maund recommends that you consult with a qualified investment
advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction
and do your own due diligence and research when making any kind of a transaction
with financial ramifications.
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