Silver Futures May Decline to $38 by End of September: Technical Analysis

Bloomberg reported that a technical analysis said silver futures may extend their recent losses.

The market news is quoted as saying:

The precious metal probably will slide to $38 an ounce by the end of September, down 3.8 percent from yesterday’s closing price on the Comex in New York, after the commodity dropped below the support level on a trendline connecting the lows of July 1 through Sept. 7, according to Spencer Patton, the Chicago-based chief investment officer for Steel Vine.

Silver futures may extend this month’s decline, the first since June, according to technical analysis by Steel Vine Investments LLC.

The precious metal probably will slide to $38 an ounce by the end of September, down 3.8 percent from yesterday’s closing price on the Comex in New York, after the commodity dropped below the support level on a trendline connecting the lows of July 1 through Sept. 7, according to Spencer Patton, the Chicago-based chief investment officer for Steel Vine.

Yesterday, silver futures for December delivery fell $1.032, or 2.5 percent, to settle at $39.501. Prices rallied in July and August and have more than tripled since 2008. On April 25, the metal reached $49.845, the highest since January 1980.

“Silver, which was showing signs to trend higher, broke below the medium-term uptrend line” on Sept. 12, Patton said in a telephone interview yesterday. “Silver looks vulnerable.”

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net