CFDs: Silver price may accelerate to $31 – Citibank

on Feb 18, 2014
Updated: May 24, 2024

The price of silver has recently broken above both its downward-sloping trendline and its 55-day Simple Moving Average and in Citi’s interpretation seems to have formed at least a short-term double bottom.

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After the price surpassed the neckline of its inverse head and shoulders pattern at $20.60, the precious metal accelerated towards the conventional target of $22. In fact, silver yesterday touched $21.95, its highest level since early November.

But where next?

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Citi’s chartists emphasize that if silver breaks above $22, the first strong resistance would be near last October’s high of $23.09. But the most important level to watch, according to the US investment bank, is the longer-term double bottom neckline at $25.10. An intraweek close above this level “would suggest the much bigger move towards $31+”.

In early trading today, spot silver dropped to $21.32 as traders extracted profits but has rebounded since mid-way through the European session. Right now, the precious metal is trading at around $21.69, down 0.69 percent intraday.

The US dollar has been grinding lower in the absence of positive catalysts and with what BNP Paribas analysts see as a general perception in the markets that Stateside economic data will remain soft and unreliable, given the continuing frigid winter.

They think though that tomorrow’s release of the FOMC’s January minutes could provide some relief for the greenback, noting that “this document has tended to come in on the more hawkish side, including views of both voting and non-voting members”.

Those minutes are due out at 19.00 UTC tomorrow.

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