Today top Citi analyst Tom Fitzpatrick sent King World News a major update on the action in the silver market.
But first, Fitzpatrick’s perfect March 9th bullish call on commodities…
Top Citi analyst Tom Fitapatrick sent KWN this note on March 9th, when he turned bullish on commodities: The Continuous Commodity Index (CCI) rallied through the top of the channel and has a reverse head and shoulders pattern that targets 395. Overall the chart below is pointing towards a positive market outlook (for commodities) (see chart below).
Fast forward to today’s call from top Citi Analyst Tom Fitzpatrick…
Tom Fitzpatrick: As we have seen so far in 2016, Silver likes to retest the break(out) (see chart below).
The Gold/Silver ratio continues to suggest Silver is the better trade. The technicals are clearer in Silver vs Gold at the moment.
In this rally, price accelerated to the topside after closing above the May highs. The price action pattern would suggest we range / trend lower this month to test the $17.70 – $18.01 support area sometime in August. Topside resistance is seen at the July 10, 2015 high of $21.58
The Gold/Silver ratio has broken down from its channel and retested the break (while posting lower lows and lower highs). Should the ratio correct to the April lows with Silver at the support mid-point ($17.86), that would suggest Gold at $1,288 (close the February highs at $1,285). (See Gold/Silver ratio chart below).
King World News note: Fitzpatrick is bullish on silver, but what he is saying is that silver may briefly move lower to test the breakout, before continuing its advance. It’s important to understand that as the Gold/Silver ratio continues to trend in favor of silver, this is yet another indication that the bull markets in gold and silver are well underway. For KWN readers around the world who are looking to accumulate physical gold or silver, remember to use the pullbacks to accumulate precious metals, rather than chasing price. Having said that, it is also important to remember that in bull markets almost all of the surprises take place on the upside — think Brexit and how it propelled gold and silver prices higher.
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