The Conversation (0)
Jun. 23, 2011 04:05PM PST
“No one knows the future, but if silver continues to behave as it has for the last 10 years we’ll trade in a range this year and then the next big move up should develop in 2012,” said Bill Downey, an independent silver and gold price analyst, and author of Goldtrends.net.
"The chart shows that the long term bull market in silver is intact and prices are heading higher," said Bill Downey of Goldtrends.net.
By Damon van der Linde – Exclusive to Silver Investing News
Silver investors may have to hold on to their metal for a little while longer if they want to see prices once again climb to new highs as some analysts are projecting from past trends.
“No one knows the future, but if silver continues to behave as it has for the last 10 years we’ll trade in a range this year and then the next big move up should develop in 2012,” said Bill Downey, an independent silver and gold price analyst, and author of Goldtrends.net. “The best strategy I see for the remainder of the year for those looking to buy would be to time purchases in the $26-28 per ounce area and the $32-34 area for longer term appreciation and to be patient for the next longer term trend to develop.”
The price of silver made a steady climb in early 2011 before reaching a peak of about $50 US an ounce in April before dropping to the mid-30 range where it has bobbed around since. Some called this dip to an inevitable market correction, while others attribute it to a manipulation by high-profile financial institutions. Regardless of the cause, there are many opinions on where the price of silver will be headed in the near future, and most of them are actually very bullish, particularly for the long-term prospects.
“Since no one knows for sure what price will do, one might want to look at what silver has done,” said Downey. “The pattern that silver has been following throughout this bull market shows that silver has spiked on four occasions since the move began. Each move has been dramatic, and each move has been followed by a sideways market for a period of 12-18 months before the next significant move began.”
As mentioned in a previous article on Silver Investing News, Downey says that this trend is suggestive that this current spike could very well provide a trading range in the 26-42 dollar area for the remainder of this year. He says this would be in line to how silver has behaved in the past and would give the market time to absorb the new and much higher price range that silver has now entered.
“While I remain bullish on silver, it will not surprise me if silver remains in a trading range – and it could be a big one – for the remainder of this year,” said Downey. “This will give the market time to adjust, clean out the rest of any scrap sales, allow silver companies to sell forward some silver and generate much needed cash to expand and develop new properties and form a new base price to give investors more confidence to buy at these levels.”
