Silver Market Update

By: Clive Maund | Thu, Dec 14, 2006
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Originally published December 13th, 2006.

Silver continues to look substantially stronger than gold, having put in a much better performance since it broke out from its large triangle pattern late in October, this outperformance being presaged by silver's triangle being upwardly skewed compared to gold's. Silver has broken above its early September highs, while gold has failed to break above its July highs and its lower August highs, and silver has come quite close to challenging its April - May peaks, which gold is a long way from doing. This strength is also reflected in the fact that silver has remained within a parallel uptrend channel and has lost little of its late November gains this month, while gold has lost the lot. The obvious conclusion to be drawn from this is that Precious Metals investors should be more heavily weighted in silver, at least until this disparity shows signs of closing up.

We can see all of the above on the 1-year silver chart, and also that following good gains in mid-late November, silver has had a mild reaction back towards the lower channel line of its intermediate uptrend, which has served to unwind the overbought condition somewhat. From here it is expected to make another run at the overhead resistance at the April - May highs, although traders should stand aside in the event of the uptrend channel failing, which may create the opportunity to re-enter later at better prices.



Clive Maund

Author: Clive Maund

Clive Maund,

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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