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Silver Stuck In Quicksand

Commentaries & Views

Silver appears to be in the twilight zone, stuck in a very tight range. The commercials are buying silver, selling gold and yet the ratio continues to expand, with gold now 82 times over silver.

On the surface, the silver Commitment of Traders report appears to be bullish. However, the charts are not playing out that way. Silver is in an extraordinarily tight range, keeping the silver bulls at bay.

The silver bulls are getting frustrated as silver wanders aimlessly in a tight range. There is a breakout coming and based on the ratio to gold and the economic conditions, expectations are silver will break out to the upside.

This may be just the time to sell gold and buy silver; the rubber-band ratio is dramatically stretched. The risk-reward ratio favors owning silver, the chart pattern suggests a huge move is coming and for those reasons, we expect silver to break out to the upside. The only question is when.

Keep those stops tight.

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.

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