Silver’s Future Price Direction

June 8, 2011 1:58 pm Published by
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By:  John Fisher

The chart below shows that silver has stabilized for the moment in the $34 to $38 range.  The 150 day moving average has been a good measure of support of the silver price in the past.  Price corrections in July ’09, Feb ’10, Aug ’10 and May ’11 have largely been supported by the 150 day moving average.

The graph on the top showing Relative Strength in the investment sector also shows increasing strength in May ’11.  This renewed strength is further supported by the bottom graph that shows both short term and long term moving averages pointing up.

I know that may sound like a lot of technical mumbo jumbo.  The most important thing to note is that silver seems to be regaining its footing.  That being said, the price could potentially retreat further to the current 150 day average price of $32.82 and possibly even further to the 200 day average (not shown) of $29.91.  Finally, a 50% correction, like that of 2008, would bring the price to $24.75.

All Things Considered – John’s Commentary:

No matter what happens, silver will see $100 in two to five years, and possibly go much, much higher.

Action to take: You only need to do two things to win in this silver bull market:

1.  Be in the market, and;

2.  Stay on board – don’t sell your position unless you absolutely have to do so.  It is easy to sell out – it is VERY hard to buy back in.

What to buy: I am recommending 50/50 gold and silver presently.  Gold has stayed strong and should be at least some part of everyone’s holdings.  I currently like American Arts Commemorative Medallions and inexpensive US silver coin.

Quote of the day: “Governments lie; bankers lie; even auditors sometimes lie: gold tells the truth.”   –  Lord Rees Mogg, economist & former Editor of The Times & Assistant Editor of The Sunday Times