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Silver May Rise Above $14 on Technical Signals, Citigroup Says

By Nicholas Larkin

Dec. 18 (Bloomberg) -- Silver may rise to a four-month high of more than $14 an ounce, technical strategists at Citigroup Inc. said, citing charts that indicate future price movements.

The metal climbed above a 55-day moving average last week, a signal to some traders that the advance will continue. A rally and close above the moving average “suggests that silver could test the 200-day moving average currently at $14.49,” London- based Shyam Devani said in an e-mail today.

Silver for immediate delivery lost 2.5 percent to $11.10 an ounce as of 4:10 p.m. today in London. The metal has slumped 25 percent this year as investors liquidated their commodity holdings to raise cash and as slowing world growth reduced demand. Silver traded as low as $8.4587 on Oct. 28 and $8.84 on Nov. 20.

“While the outlook for both gold and silver is bullish, we would not be surprised to see silver outperform in the short term,” New York-based Tom Fitzpatrick said in the e-mail.

Gold, which investors tend to buy as a hedge against market turmoil, has climbed 2.3 percent this year.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Resistance is where sell orders may be clustered, while support is where there may be buy orders.

To contact the reporter on this story: Nicholas Larkin in London at [e-mail]
Last Updated: December 18, 2008 12:25 EST

http://www.bloomberg.com/apps/news?pid=20601012&sid=agLcj6wDSp5c&refer=commodities