Friday, February 17, 2006

Silver intraday chart & toughts

The price action of silver is very similar to gold. The fundamentals behind the bull markets in silver and gold have much in common but each metal is having its own advantages & disadvantages. One can make good arguments of why silver is a better buy then gold and visa versa. Nevertheless, I don’t want to get into this argument and would just like to suggest that both will perform remarkably well this calendar year – regardless of the Forex market. I mean that in this stage of the bull market the action in the gold and silver markets is becoming less and less dependent on the action of USD / EURO, USD / YEN … ETC. Gold and silver are distinguishing themselves vs. the rest of the currencies. It’s about us and them situation: on one side you have the millenniums old, forgotten, natural Forex, on the other side you have the experimental, politically managed, local seignorage currency. This fact is best seen through the increased volatility in the price of gold and silver. In addition the correlation in the exchange rate of gold and silver in different paper Forex is much higher then before. For example there is not much difference in the chart pattern of Gold in Euro or Gold in USD. So the point is: it is important to track both gold and silver even if you just invest / trade / speculate in one of them.

Click on the chart below to enlarge:

silver chart

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