Chirs Verrone, technical analyst from research and analysis firm Strategas Research Partners, calls silver "recklessly high" at recent levels near $50 an ounce, but he says the recent drop is evidence of a base being built in the $40 to $45 area.
Silver, undergoing a more than 5% today and down around 10% in the first two trading days of May as I type, is perhaps the most controversial, and lucrative, investment of recent years. As nothing in nature moves higher forever, there are two ways for silver's explosive move to end -- either with a horrific crash or with the entity moving sideways for a period in a sort of "pause that refreshes."
Verrone is firmly in the latter camp, and he suggests patiently adding money into a silver pullback, such as the one happening now, is an investor's best bet.
In only a slightly less controversial investment position, Verrone is unwaveringly positive on gold, seeing a more conservative uptrend that could continue to $2,000 an ounce in a relatively uninterrupted manner. After hitting $1,570 an ounce yesterday, gold has moved back to near the $1,540 point.
Moving away from the Glitter Twins (gold and silver not Jagger and Richards) and into base metals, Verrone says "Dr. Copper" is pointing to better days ahead for the global economy. Copper earned it's honorary Ph.D. in the trading community on the basis of the metal's tendency to move higher or lower ahead of economic trends and has been cause for concern due to recent weakness. Verrone sees the pattern as more basing and filling. He notes that copper surmounted the psychologically important $4 level, and he believes it's simply taking a breather here prior to new leg higher.
Is Verrone right on silver or a true believer getting on board the headline rally just before silver gets tossed into the smelting pot of history? Argue amongst yourselves in the comment section below. I'll be around to officiate, bait and generally join the fray. Of such heated debates are forged investable opinions.
Disclosure: Macke is long GLD. Email him and the rest of the team at email@example.com.
- base metals