Look At 'The Long Side Of Silver' As Prices Hit One-Year Highs - Hightower Report
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(Kitco News) - Gold and silver have good upside potential at the moment, but analysts at The Hightower Report are advising investors to place their bets on “the long side of silver.”
“Traders should focus their attention on the long side of silver, which is showing very impressive chart action, is supported by ongoing investment in derivative instruments, and remains very cheap relative to gold,” the analysts wrote on Wednesday.
Silver saw an impressive rally this week, hitting a fresh one-year high of $16.68 an ounce Thursday morning. At the time of writing, September Comex silver was trading at $16.50, down 0.73% on the day.
“Traders should consider bull call spreads in silver and/or being long silver against gold,” The Hightower Report said.
There are several key drivers supporting the precious metals prices this summer, including looser global monetary policies, the analysts pointed out.
“The gold and silver markets continue to be supported by rate-cut hopes, and both markets continue to see inflows into ETF’s,” they wrote.
The precious metal’s ETF space has been booming, with the world's second-largest gold-backed ETF iShares Gold Trust (IAU) seeing its biggest inflows in more than a year on Monday and silver’s iShares Trust adding 146.5 million ounces — the most in six years.
From the technical perspective, prices are more likely to go up than down, said the report.
“The path of least resistance remains up in both gold and silver, and it should be noted that one metals fund manager overnight indicated that gains in gold prices should result in even larger gains in silver prices,” the analysts wrote.