'The Most Hated Precious Metal' Will Finally Rise In The Next Few Months - Analyst
(Kitco News) - Silver, which has been “the most hated precious metal” this year, is finally going to rise in the next few months, according to one analyst.
Silver has disappointed many investors this year, with Comex silver trading down 16% year-to-date, Boris Mikanikrezai, precious metals analyst at Metal Bulletin, wrote in a Seeking Alpha post last week.
Mikanikrezai sees silver heading higher in the next few months, but first, prices need to stabilize around the $14 an ounce level.
“The speculative community is still skittish toward silver, hence the lack of fresh buying. But if the current wave of short-covering helps silver prices to stabilize at $14 per oz, longs could come back, thereby extending the speculative normalization process. This will push Comex silver spot prices higher, and ergo, lift the value of the iShares Silver Trust ETF,” he said.
Silver is a great buying opportunity for investors at the moment, the analyst added, citing how cheap the metal is compared to other precious metals.
"Based on a number of metrics (e.g., gold/silver ratio), silver looks extremely cheap. As such, it constitutes a long-term buying opportunity,” Mikanikrezai said. “Silver has been the most hated precious metal so far this year, with Comex silver down 16%. In contrast, Comex gold and Nymex platinum are down a smaller 7% and 11%, respectively.”
In the short-term, Mikanikrezai advised to watch the macro environment, adding that it will be the primary driver for silver prices as the year wraps up.
At the time of writing, March Comex silver was trading at $14.36 up 1.01% on the day.
Kitco’s senior technical analyst Jim Wyckoff said that silver bears currently have “the solid overall near-term technical advantage” when it comes to short-term trading.
“Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the October high of $15.055 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $13.985. First resistance is seen at this week’s high of $14.545 and then at last week’s high of $14.66. Next support is seen at this week’s low of $14.185 and then at $14.00,” Wyckoff wrote in his latest post.