Saturday, September 18, 2010

$21, $21.37, $22.76, $24 Key Levels for Silver

$21-$21.34 is the obvious area which needs to be overcome for silver to move higher.  My near term targets are $21, $21.37 and $21.76 but I think over the coming years silver can get to triple digits. (Click here for related article).  Bank of America Merrill Lynch has their silver (futures) resistance at $21.50-$22.00, and $24.00 in their latest market analysis report. [1]

Following is an Elliott Wave count I did with monthly/yearly granularity and my measured targets:
The precarious sovereign debt situation and lack of faith in fiat currencies will bolster both silver and gold demand.  With 21% real unemployment we in the US are not going to dig ourselves out of the debt hole anytime soon. Add to that the event risk of the 800 trillion to 1.5 quadrillion worth of derivatives which could explode on us at any time.  Our debt will be monetized and that will debase our currency.  Some precious metals analysts still predict the bull run in gold and silver will continue even at these levels. [2, 3, 4]  Per my analysis in the chart, if this is wave 3 of the Primary Elliott Wave cycle then a continued bull run should last at least several more years (very big speculative guess though).

Sources:
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1. Market Analysis Comment (September 13, 2010), page 5, Bank of America Merrill Lynch
2. Super Bull, James J Puplava CFP
3. Gold Will Outperform Many Fold, Ben Davies, CEO Hinde Capital Management
4. The Battle for $21 Silver Begins, James Turk Free Gold Money Report

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