The daily chart for silver also makes interesting reading, as we rampage higher into the roaring twenties and is another of the metals I have been forecasting to rally over the last few months, so I’m delighted to see the pull-through effect gold is having on the industrial metal after such an extended period of congestion and one which validates Wyackoff’s second law of cause and effect. So expect to see this trend develop strongly in the same way for gold.
From a technical perspective, last week’s pause in the price action was no surprise and one I highlighted given the volatility indicator trigger on the daily chart and as such we would expect congestion or a possible reversal. In this case, it was the former and not hard to see why. Notice the down candle with the narrow body on very high volume. It’s clear the big buyers were stepping in here and buying on the pullback and therefore from a volume price analysis perspective, the move was set to continue which is what we have seen in early trading at the start of the new week. And with gold looking to move to $2000 per ounce and beyond, we can expect to see silver follow a similar path through $30 per ounce.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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