Who says silver is cheap?! Silver or XAGUSD in the trading arena is in fact trading at its all-time high along the much coveted gold or XAUUSD. So don’t get left behind… catch the silver express when it takes a halt!
Just recently, silver has managed to mark a new all-time high at just below $42.00 per ounce. While many people would think that it is already bound for a fall since given its tremendous run-up, technical signals of gold (yes gold!) suggest otherwise. What’s interesting in how the price of silver behave is that it has a very strong correlation with the price of gold. This means that, whenever the price of gold rises, silver generally goes up as well. In the same way, the price of silver dips in most times whenever gold falls also. This positive relation between silver and gold can be seen in the chart above.
Now, gold has just broken above an inverted head and shoulders continuation pattern. Given this, we can determine its potential upside by projecting the height of the pattern from the point of breakout at around $1,650.00. So given the positive correlation between the two and the likelihood that gold could hit $1,650.00, it’s therefore likely that silver would rise further and even mark a new all-time high. In the meantime, both silver and gold could retrace a bit given their overbought conditions. Hence, any retracement, in my view, would be a good opportunity to go long at a better price.