Wednesday, July 25, 2012

Silver Chart: Rallies vs Corrections (London PM Fix)

Here is an update to a chart I created and posted around 6 months ago.

It shows rallies and corrections in Silver as per price at the time of the London PM Fix (so is not absolute in terms of intraday lows and highs).

The last time I posted the chart the PM fix pointed to September being the low point, but updated numbers show that a lower US$26.12 was recorded on December 29th, 2011.

What the chart and data doesn't show is that a lower intraday price price was recently made (only by a couple of cents according to Incredible Charts) on June 28th, 2012. So while we haven't seen a fall as large as the 2008 correction in % terms, it has certainly been drawn out longer, by some 6 months or so as the price of Silver bounces along the bottom at a little over $26.

See below for the chart (data sourced from Perth Mint website):


If we see a lower London PM Fix (than the $26.12 recorded December 29th) in the near future then the length of the correction will be extended substantially.

While this is possible, I think it's probable that the recent intraday low on June 28th marked the bottom of this correction and we are likely to see higher prices from here:

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