Data Suggests Silver Correction Ahead
Note: Un update was made to the PFS Group silver composite due to a revision made by one of their in-house analysts.
In 2004, 2006, and 2008, the price of silver experienced three large separate moves followed by similar corrections of magnitude and duration. Our in-house analyst, Chris Puplava, averaged them into a single composite (red line below) and compared the current chart of silver (black line) to see how closely they compare. As you can see below, the similarity between silver currently and the average of the past three moves has been very close.
I bring this chart to your attention again—Chris first featured it in his article “Silver’s Destiny with 200”—since, as you can see, the composite is forecasting a steep drop in silver sometime soon. Given silver’s current bias as an industrial metal and global economies around the world facing recession, weakened demand should translate to a lower price. If the composite is any guide, we should expect to see support in the low 30s before heading higher.
About Cris Sheridan
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