New York, NY (PRWEB) October 10, 2012
Sasha Cekerevac, financial expert and contributor to Profit Confidential, notes that the U.S. Commodity Futures Trading Commission has recently reported that bets on higher silver prices have jumped almost 10 times in the last two months. Cekerevac reports that investors piling into silver in anticipation of a new monetary stimulus plan by the Federal Reserve have caused this extraordinarily strong move up in silver prices.
“Hedge funds are the most bullish on silver prices than at any time over the past seven months,” states Cekerevac, citing Bloomberg.
The Relative Strength Index (RSI) is indicating that the move in silver prices has become quite overbought in the short term, says Cekerevac. However, he notes that this does not mean that silver prices have to go down; as long as the support level at $32.00 holds, Cekerevac states, silver prices should see a move up.
Cekerevac adds that if support at $32.00 breaks, the next level of support is $30.00, which would mean a failure to establish a new uptrend.
“Another worry is that small retail buyers are not accumulating this commodity,” reports Cekerevac. “The U.S. mint has sold approximately 25 million ounces of American Eagle silver coins, which is about 23% lower than the previous year.”
Cekerevac highlights that the push higher in silver prices is primarily due to hedge funds. He reasons that most hedge funds are very quick traders, in and out rapidly; if support is broken, it would mean a massive dump into the market as hedge funds close their positions.
Cekerevac reports that a key technical analysis level has just been broken, the piercing of the long-standing downtrend line, suggesting on the longer-view that the market for this commodity will be bullish.
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