Where's Silver Going?

By Brad Zigler

Real-time Monetary Inflation (last 12 months): 4.7%

Gold's race into new high territory and has left silver lagging far behind, much to the chagrin of investors anxious for some moderation in the gold/silver ratio.

Silver's a good news/bad news story. The good news for the December COMEX contract is that it's moved up to start working the upper half of its volatility band. The contract settled just a penny off its floor-session high at $17.45 on Friday. The contract's RSI and MACD indicators have turned neutral-to-bullish. (Click chart to enlarge)

NYMEX/COMEX Silver (Dec '09)

There's bad news, however, in the volume trend. Recent volume spikes have been featured on down days, a signal of market weakness. Additionally, money managers have recently been liquidating long positions.

If bulls develop more confidence, they can push prices to test the December contract's October high at $18.18. For holders of the iShares Silver Trust (SLV), that translates to a share price of $17.64. First, though, last week's high at $17.78 ($17.42 for SLV) will need to be hurdled.

A break below last Friday's low of $17.03 ($16.73 for SLV) would give the bears an edge.

Comments

[LanceLink:]

Done, and done. High of $18.13 on double volume.

Nov 16 08:44 PM

[picman:]

What a load of crap this article is. You guys love to ramble on about all the senarios and in the end give no advice at all. SILVER IS A GOOD INVESTMENT. Can any of you so called experts simply find the balls to make that statement??? Silver is going to break $20 an ounce within the next 3 months. Can you handle that one????

Nov 17 03:00 AM

[prairiedog555:]

I agree with picman. I read this forum for insight and advise with facts to back up picks.
Most of the contributors participate just to get their name or company in print and are like my wife, just talk to hear their own voice and offer the obvious or yesterdays news.

Nov 17 07:57 AM

[walkwithalimp:]

SLW, SLW, how I love ya..how I love ya my dear old Wheaton! I have (had) 2 sell prices. $16 was taken and enjoyed....$21 is next.

Nov 17 11:16 AM

[The Recusant:]

As frequent articles in SA prognosticate a correction in gold, the skittish who want to stay invested in PMs can only turn to the others. Since silver is assumed to be underpriced, it is a logical choice for investors. It will continue on its rise and if it picks up globally, it will hit a new high. That's my take on it, anyway.

Nov 17 01:43 PM

[5142152-337:]

Hey 'dog: SWEET!

Nov 17 03:12 PM

[Luke Skywooker:]

Silver has such a small market cap, and yet, just 35 years ago, it was real money. (Maybe is still is)

Nov 17 05:42 PM