Skip to main content

Where Silver is going ? is Silver due for correction ?



Everyone is talking about Silver these days. Silver gave an extraordinary return to the investors. But in spite of  these big rises from few years it is still increasing and people are talking about breaking of $50 level. It will be better if we see the long-term chart of Silver.

It is sure that Silver is now in highest level, and it makes a huge spike. If we see the chart then we can understand that Silver has a tendency to make this type of spikes, but recent spike is the mother of all. Not only in case of Silver but for most of the things this type of quick spike make things more vulnerable for collapse. As we can see that every time Silver made this type of spike it has collapsed.

Though nothing is certain in this risk taking world but general view is, this type of  positions are for sell. What goes up that comes down.

Gold is another precious metal that rises lot but if we compare it with Silver, then Silver is very expensive compare to Gold. Though I donot have much of data but let consider from year 2001 –




Metal
2001
2011 (Now)
( % )
Gold
$300
$1,500
500%
Silver
$5
$50
1000%








Metal
2009
2011 ( Now )
( % )
Gold
$700
$1,500
115%
Silver
$10
$50
500%




Now if we compare it with a short-term period



Metal
   2010 ( Sept. )
2011 ( Now )
( % )
Gold
$1,250
$1,500
20%
Silver
$20
$50
150%




As you can see that in every time frame Silver rises more than Gold, and it is quite a lot.  It is sure that Silver needs some corrections. There are also some technical indicators which are showing that it is over-bought.

There are lot of short-term supports for Silver, immediate support looks to me around around $42 level  but better one is in  $40-$41 region. I do not like some of last week’s closing  figures of the chart.
As I told previously that there are some rumors that some groups are trying to corner the Silver.  And there is also a news that different Central banks are secretely buying Silver. If above news are true then we can not see any huge correction in Silver price right now. As basic investment rule is – when there is a demand, price will rise.

But if someone ask me where do you want to go from here?   I will like to hold Gold even in this price rather than Silver.





NOTE :  Please see the disclaimer below this blog.

Popular posts from this blog

DAX forecast for coming week ended 15th March, 2013.

This week was very good for Dax, though it is getting resistance at 8100 range. Now it has a chance to test downside again. I think even if Dax tests lower levels, it has more chance to bounce back from around 7800 range and therefore it will again test upside.

On the other hand if it shows flat movements around 8000 range in initial days of the coming week then there is a chance that it may take a decisive call in later days. Considering the recent trends it has the chance to test higher levels may be around 8200 but that will be a very aggressive call after taking in to account the movement from last December. I will worry about the downside when Dax will be testing levels below 7600 ranges.
NOTE: Please see the disclaimer of this blog.

Fed’s rate hike Vs Sovereign rating up gradation

Financial market is very much worried about the rate hike in US, probably this is going to come in coming December. But I think that is not going to change much of the things. Even Fed hikes rate in December it will be not so much, because we are forgetting one thing that interest rate in US is around zero so even they hike rate by 0.25-50% basis points (at most) in this year that will not be enough cause for Dollars to change their locations around the world especially markets have already discounted this coming rate hike in US.

A new disaster is coming in EU banking sector, whom to blame, big Audit firms!

First I was thinking what should be the title of this posting? Will it be good if I write that big audit firms set the time for EU bank collapse! If someone is thinking that financial crisis is over then think twice because the coming EU banking crisis is no way less than 2008 financial crisis. The time bomb will explode at some point of time in future, the time has not yet set for it. In that tsunami, forget about the smaller if any major banks collapse then I will not be surprise.