Technical analyst Clive Maund finds that signs are emerging that silver is getting read to break out.
On its long-term 10-year chart silver superficially looks like it may
still be in a bear market, but on more careful inspection we can see that a large Head-and-Shoulders bottom pattern is completing, which is
tilted compared to the similar pattern that is completing in gold,
because silver tends to underperform gold at the end of bear markets and
the beginning of bull markets. As we can see, unlike gold, it is still
some way from breaking out of this base pattern, but should do so not
long after the dollar breaks down from its Broadening Top, that we look
at in the parallel Gold Market update.
Volume indicators are most auspicious, with the On-balance Volume line
in particular looking very bullish indeed, since it is already at new
highs, which is remarkable given that the silver price is still a long,
long way from its 2011 highs. Since silver is in the late stages of
forming the Right Shoulder of its H&S bottom it is at a good point
to accumulate, although given that there is considered to be a high
chance of a near-term relief rally in the dollar before it finally
collapses, we may see an even better price in coming days and weeks,
although this is likely to be the last chance to buy silver anywhere
near to its bottom for this cycle.
On silver’s 6-month chart we can see that it is at a good point to react
back on a near-term dollar bounce, because it has arrived at the top of
the channel shown in an overbought state, and any such reaction will be
regarded as throwing up a buying opportunity, especially if it should
break down from the channel and drop back towards its July lows,
although it is considered unlikely that it will drop back this far.
Copper reacted sharply on Friday, and as it has been leading the metals
in the recent past, this is viewed as an additional sign that a dollar
bounce is pending and a near-term reaction in gold and silver. The
latest copper chart may be viewed in the new Gold Market update.
Clive Maund has been president of http://www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
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1) Statements and opinions expressed are the opinions of Clive Maund and not of Streetwise Reports or its officers. Clive Maund is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Clive Maund was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
Charts provided by the author.
from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17693