Silver Breaking Out

May 6, 2009 - Email Alert Sent 11:40 AM New York Time

          A month ago, I recommended buying silver and gold on weakness. This week, silver started to closed above its 50 day moving average for the first time since the end of March. Silver has broken out of the $11.80 to $13.00 range in which it has been trending for the last month. Gold so far has not closed above the 50 DMA of $912. I would like to see that and then closes above $920 so that gold also breaks out of its trading range of $868 to $918. When that happens, we should have confirmation that the next precious metals rally is underway.

          Silver has moved up almost two dollars from its lows, while gold has not move up that much, percentage wise. Typically, I favor silver, as it tends to have bigger percentage gains than gold. However, since gold has not yet broken out, if you are sitting on cash waiting to buy, gold would be a better value than silver at the present prices. The general stock market has had the biggest one month rally since the Great Depression and the Bank Stress Test results are due to be released tomorrow. The financial landscape has improved very little and I expect investor enthusiasm for equities will fade as more discouraging economic news comes to light. The stock market rally would then turn into a sell off and people will shift more to safe haven assets like gold, silver and government bonds.

Best wishes on your investing and future and God Bless,

Timothy Silvers

 

Disclaimer: This article represents the opinions and personal views of Timothy Silvers and is not intended to be investment advice. If you choose to use this analysis for your personal trading, Timothy Silvers assumes no liability for the direct or indirect losses you may incur due to using this article to make your investment decisions. You are totally and completely responsible for your own investments. At any given time, Timothy Silvers or his friends and relatives may have positions in silver related investments that may or may not follow the recommendations contained in this article. The information in this article may not be completely correct and accurate. Even though Timothy Silvers has done his best to review the content and accuracy of this article, he is in no way liable or responsible for any mistakes or omissions.