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Silver forecast for the week of December 31, 2012, Technical Analysis

By:
Christopher Lewis
Updated: Aug 21, 2015, 02:00 UTC

The silver markets have done absolutely nothing over the previous week, and have sat still have the $30.00 level. On the daily chart, this is the site of

Silver forecast for the week of December 31, 2012, Technical Analysis

The silver markets have done absolutely nothing over the previous week, and have sat still have the $30.00 level. On the daily chart, this is the site of a gap, and that could be part of what has made the supportive action so impressive. Also, you have to keep in mind that we are at the absolute in that of the year, and many of the larger firms out there simply will not be taking positions.

With this being said though, you can easily see that there is a nice consolidated rectangle between $26.00 and $36.00. We are closer to the bottom than the top; however we feel that the support from the gap is probably what we will be paying more attention to than anything else. Below the current prices, there is a significant amount of support all the way down to $26.00, and because of this we are not willing to short just yet as we have a longer-term upside bias to this market anyways.

We hold silver in the ETF and physical form as well, so it makes no sense to jump in and out of the market and against our other positions. In fact, what we choose to do is buy on signs of strength or support, and this simply strengthens our returns overall.

Central banks around the world continue to do more quantitative easing, with Japan being the newest one to announce extended measures. Because of this, we feel that there is much more upside potential in silver over the long run than downside as central banks around the world are buying precious metals anyways. This puts a little bit of a bid in the marketplace naturally, and because of this we are simply going to wait to see if we get a supportive candle in this general vicinity, or even at slightly lower prices. We never sell silver, and we do plan on buying and holding it for very long periods of time. In fact, we believe that the $50 an ounce price will be seen again over the next couple of years.

 

Silver forecast for the week of December 31, 2012, Technical Analysis
Silver forecast for the week of December 31, 2012, Technical Analysis

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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