Comment: Having unwound all of 2007 and 2008’s excesses, spot silver has spent many weeks since mid-October trying to form an interim base against the pivotal area around $9.00. A ‘rounded bottom’ was completed with last week’s close above $11.50. Slowly at first, then gathering speed, we expect prices to rally back up to $14.00/15.00, possibly gathering pace were it to break above here allowing the move to extend to the $18.00 area. Note that we expect it to outperform spot Gold, so that the ratio drops from 80.00, one Standard deviation from the mean since 1982, to 67.00/70.00.
A weekly close below $10.25 suggests the latest attempt at a rally has failed.
