Silver Price Action for 2012-2013

In order to come up with shorter-term price projections, I used StockCharts‘ free charting services to produce the following 5-year silver, spot, weekly chart.

Given the trend line convergence (around the red oval) near $32 on September, 2012, and the Fibonacci Time Zones for May, 2012 and June, 2013, I suggest the following optimistic view:

1. Major price resolution by September, 2012. The contracting symmetrical triangle forming since September, 2010 (on the breakout over $20) will continue and resolve on (or shortly before) September, 2012.
2. Resolution will be to the upside. The resolution will be to the upside, with a resumption of the long-term uptrend (above the blue line since 2009 and above the orange line since 2002).
3. A steep climb into June, 2013. The uptrend will follow the green arrow to the price objective of $52, and any pullbacks will not break below the ascending blue trend line through June, 2013.
4. Shorter-term, meaningful pullback between May and September of 2012. Shorter term, I’m looking for a May, 2012 high around $36-$37 (at Fibonacci Time Zone 34) followed by a meaningful pullback to the $31-$32 area by September, 2012. This sets the stage for the steep climb into June, 2013 described previously.

The pessimistic view suggests a breakdown below both the orange and blue trend lines on or shortly after May, 2012, then a bounce that approaches the September, 2012 convergence area, followed by further weakness in the ensuing months.

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