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Gold And Silver Prices Look To Rebound

February 9, 2010 – As precious metal values correct, gold and silver prices are both looking to rebound. While opinions on the recovery are split, both metals have started the week strong and appear to be reversing some of the losses that have mounted in the past month.

Many analysts were divided about the factors that have been driving gold and silver prices. Some like the Citigroup’s analysts describe a demand drop saying, “The strength of investment demand over the last few years has been reflected in physical bullion and ETF demand although both are showing signs of dissipating. Investment in physical bullion has slowed sharply. ETF holdings are stable at high levels, as concerns about a global banking crisis abate.” Other groups point to the recent rally by the US dollar. Correction has been another explanation, with analysts such as Franklin Sanders of The Moneychanger predicting in January, “Gold’s primary trend is up, targeting at least $3,130.00; silver’s primary is up targeting 16:1 gold/silver ratio or $195.66.”

Some technical measurements suggest that the latter opinion of a correction may be accurate. Gold has seen its RSI fall into the 30s, an indication of being oversold and ready for increase; silver has been trailing gold in the gold/silver ratio, with its 72:1 ratio quite high and suggesting a possible rise for the white metal as well.

As gold and silver prices look to rebound, investors should analyze their portfolios and consider buying both. While gold and silver tend to track together, owning both metals offers the chance to profit from movements in their individual prices. 

Shannon King

Senior Staff Writer – GoldSilver.org

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