Silver prices have big upside potential
(Kitco News) - Monday's strong gains in the silver market have focused more trader and investor attention on the metal that many term gold's little brother. Indeed, safe-haven demand has driven both silver and gold prices solidly higher since early-summer. Today's burst in silver prices to a two-week high has significantly improved the near-term technical posture for that market. Near-term chart resistance for silver now lies at $19.00 and then at this year's high of $19.75, basis December Comex futures.
An examination of the longer-term monthly continuation chart for nearby Comex silver futures should have the bulls licking their chops. If silver prices can push above strong longer-term technical resistance at the $20.75 area, then bulls would gain substantially more longer-term technical power, as upside potential really opens up for sizeable gains that would not be measured in cents, but in dollars.
See on the monthly chart dating back over 50 years that once silver prices crack the $20.00 level or just above, major upside potential exists. Even silver prices trading at $25.00 an ounce would be nowhere near the high of $49.82, basis nearby futures, scored in April of 2011. The record high in nearby silver futures prices was scored in January of 1980, at $50.36. However, veteran silver market watchers still debate the actual record high price scored in silver, as when those spike highs were made, the "bid and ask" spreads were likely very wide amid highly volatile trading.