Silver, the fourth-biggest loser in the Standard & Poor’s GSCI index of 24 commodities in the past year, may drop another 5.2 percent to about $28.49 an ounce, according to technical analysis by Commerzbank AG.
Silver, which declined 11 percent in the past 12 months, slipped near the 2008-2013 uptrend line currently at about $29.21. Prices will probably fall below that level in “the weeks ahead” and drop toward the July 2012 high of about $28.49, Karen Jones, a technical analysis at the bank in London, wrote in a report yesterday.
“This support area may hold in the short term but we believe that it will give way within the weeks ahead,” Jones said in the report, referring to the 2008-2013 uptrend line. “Our bearish medium-term forecast will remain in place while silver trades below its January high” at about $32.51.
Silver for immediate delivery is down 1 percent this year at $30.055 and reached a six-week low of $29.6912 on Feb. 15. Only cocoa, sugar and coffee declined more in the past year among the GSCI gauge of raw materials. About 53 percent of the metal is used in industrial applications from televisions to batteries, the Washington-based Silver Institute estimates.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. A support level indicates a price at which buy orders may accumulate when a security is falling.