Golden cross in the silver technical chart signals a big price advance imminent

Whatever the worries about slowing global industrial output now for theprice of silver, the signal from the technical charts is completely unambiguous. There is a classic golden cross with the 50-day moving average crossing over the 200-day moving average. That means buy.

Basically this is an upward price momentum indicator. Traders see this as a classic buying signal, and so it tends to be somewhat self-fulfilling. As the silver price chart below from shows, the last three times this has happened it has been followed by an explosive price movement:


Do the math and extrapolate the previous price movements from the golden crosses: a 47 per cent move in five months takes us to $51 an ounce by next February; a 103 per cent price hike in nine months takes us to $70 by next June; and 277 per cent over 25 months has silver at $130 an ounce in October 2015.

 Caveat emptor

 Of course we can still see short-term price pull backs within any of these timeframes. Silver is notoriously volatile.


International Metals Group

Anticipating market cycles is a complex and time consuming process and many investors simply do not have the time or expertise to shift their assets as conditions change. The precious metals market certainly offers many short-term opportunities that are very attractive and should always be taken advantage of when possible. However, we prefer to focus on a long term disciplined approach that provides you with the best possible profit potential.

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