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Silver Not Done Rallying; Look For 8% Upside From Current Levels

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(Kitco News) - Silver has upside potential and could trade up to $17.92 an ounce, according to one technical analyst.

Boyd Baker, analyst for Ira Epstein, a division of Linn and Associates, uses an analysis technique that his firm calls “PriceCounts”, which utilizes the theory that the initial leg of a new price trend is “all the information needed to project one or more objectives in the direction of the new trend,” according to a trading overview document by Ira Epstein.

According to Baker’s analysis, July silver futures initiated a new PriceCount when it closed above $16.865 twice this past week.

The first upside target, according to this PriceCount, is $17.437 an ounce and the second objective is $17.922.

Silver has been trading in a narrow range since January 2018 and has broken past $17 an ounce for the first time since April on Wednesday.

Baker noted that from here, upside potential remains intact as long as July futures do not trade below $16.19. The comments come as silver has struggled to hold on to its gains as gold futures fell to a six-month low Friday. July silver futures settled the week at $16.48 an ounce, down almost 5% from its highs earlier in the week.

“The $17.45 zone appears to be key resistance as this was a previous PriceCount that was already met,” he said in a report.

Baker recommends trading July silver 1,000-ounce futures (YIN19) at $16.75 or better.

“Place sell stops at $16.30. Take half profits at $17.40 and then move stops up to break even. Exit remaining positions at $17.90,” the report said.

Silver has struggled to keep up with gold for most of the year. While gold has traded range-bound the last month, silver slowly crept up, pushing the gold-silver ratio to 77 from 80, where it hovered until mid-May.

Some analysts remain long-term bullish on silver, as the electrification of cars and the emergence of renewable energy will require more of the white metal in batteries and solar panels.

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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