(PRWEB) September 27, 2012
George Leong, contributor to Profit Confidential, reports that silver is hot again, at its highest level in six months, and according to Leong, there’s more to come. Leong believes the launch of a third round of quantitative easing (QE3) by the Federal Reserve helped drive another upside move in the white precious metal.
“With QE3, expect to see continued low interest rates and a soft U.S. dollar, which in turn could drive consumer spending and inflation higher, along with silver and gold prices,” advises Leong.
Leong notes that just as gold is considered more of a pure-play hedge against risk, silver is also, but to a lesser degree. Leong believes that silver is driven higher by increased jewelry demand and industrial output, as many electronic products incorporate the use of the precious metal.
Based on Leong’s technical analysis, the price of silver has been sizzling on the chart since a breakout in August, based on my technical analysis.
In the article “Why the Sizzle in Silver May Stick Around,” Leong notes that the upward move in prices above the 50- and 200-day moving averages (MAs) is bullish.
“The moving average convergence-divergence (MACD) is also quite bullish but may be approaching a top,” states Leong. “There is the risk that the run-up appears to be overextended and may be vulnerable to some near-term selling pressure.”
“Speculation and added volatility now make silver a good trading commodity for futures traders looking at playing both the short and long end,” says Leong.
Leong also points out that over the past 20 years, silver has largely outperformed gold, as shown in the following chart that indicates returns to July 1, 2012.
The Profit Confidential financial expert believes that if silver can hold, we could soon see the precious metal take a run at $35.00.
“Of course,” he says, “this depends on the global economy picking up. Silver is used in numerous industrial and electronic applications and is more of a trade with the direction of the global economies.”
Leong believes that with the current gold-to-silver ratio of 51:14, it means that silver could be undervalued and could head higher towards the $38.00–$40.00 level, warning potential investors to wait for some overbought selling to surface before buying.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.