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Silver Has Room To Run Higher Once It Breaks $16 - Andrew Hecht

Kitco News

(Kitco News) - Gold prices have pushed above $1,300 an ounce, but it’s silver that investors should keep their eye on, according to one market analyst.

Silver futures are within striking distance of $16 an ounce, trading at its highest level since mid-July, as momentum continues to build. March silver futures last traded at $15.92 an ounce, up 0.51% on the day. Meanwhile, gold futures also traded near a multi-months high above $1,300 an ounce. April futures last traded at $1,315.50 an ounce.

Andrew Hecht, author of the weekly Hecht Commodity Report, said that he thinks it’s only a matter of time before silver prices move significantly higher, with a break of $16 an ounce, signaling a move to the next major resistance level at $17.30 an ounce.

He added that a rally in both gold and copper markets will continue to be bullish for silver throughout the year.

“I like what gold’s set up and what it’s telling me about silver,” he said. “Gold broke out to the upside and I think it’s only a matter of time before silver follows. The more bid-up gold gets the better silver will do.”

Hecht’s comments come as the U.S. and China started a new round of trade talks. He added that there is growing optimism in the marketplace that a trade deal will get done sooner rather than later.

“Once a trade deal gets done, base metals like copper will take off and that will be another bullish factor to drive gold prices higher,” he said. “Until then, silver investors need to keep their eye on gold.”

Hecht said that he is also bullish on silver because of investor positioning. He added that the market can still go higher as open interest is below 200,000 contracts.

“Historically, silver hasn’t been a crowded trade until open interest reaches 240,000. As of yesterday, silver’s open interest was 195,000 contracts, which tells me that the market is not overly long,” he said.

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.