Silver Is The Metal To Watch As It Plays Catch-Up With Gold - Analysts
(Kitco News)- While all eyes have been on gold’s massive rally Wednesday,the bigger play to come, according to some analysts, could be in silver.
April gold futures, settling the session at $1,358, up more than 2% on theday, is seeing its biggest percentage gain in nearly two years. At the sametime, silver prices saw a 2% rally as March silver futures settled the sessionat $16.878 an ounce. But, to put the move in silver into perspective, thepercentage gain was less than the move recorded two days ago.
With gold and silver moving in tandem, the gold/silverratio, according to Kitco.com, has held steady at 80, holding near a multi-yearhigh. According to some analysts, the historical average for the gold/silverratio is around 60. Traditionally, silver is more volatile than gold, meaningthat it has great price swings outperforming on the upside and underperformingon the downside.
“Silver is not outperforming gold today because gold is beingdriven by technical factors,” said John Weyer, director of commercial hedging at WalshTrading. “But I don’t think you should discount silver.”
Weyer said that he could see silver outperforming gold wheninvestors and traders start paying attention to the market’s demandfundamentals. He added that a booming global economy should lead to higherdemand for silver, which has strong industrial uses.
“If you believe in the infrastructure story in the U.S. thenyou have to like silver at these levels,” he said.
Todd ‘Bubba’ Horwitz,chief market strategist of BubbaTrading.com, said that he continues to likesilver and it is only a matter of time before the metal has its day in the sun.
“I think at these levelsgold is overbought and silver is under-owned,” he said. “At current levels, silverhas room to run to $17.60 an ounce before the market looks stretched.”
Bill Baruch, president ofBlue Line Futures also thinks silver is the metal with the most potential.
He noted that gold couldface significant resistance at $1,360 an ounce in the near-term.
“If you don’t own anyprecious metals at this point then silver offers the best value,” he said.
In the near-term, analystssay that silver needs to retake $17 an ounce, a psychological level.
“Silver'snext upside technical target is the January high of $17.555. Silver'slonger-term upside objective is $18.64,” said Jim Wyckoff, senior marketanalyst at Kitco.com “All of these price targets are now within strikingdistance in the coming days, or few weeks.”
By Neils ChristensenFor Kitco News
Follow neils_C
nchristensen@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.