Technical analysts at Barclays Capital see a strong potential upside for silver after the trading pattern completed a "pennant formation."
The British bank is saying that silver may gain to as much as $21.35 per ounce.
Silver futures rose 1.13 percent to trade at $19.895 per troy ounce, nearing the key psychological resistance point of $20 per ounce. Gold, meanwhile, dropped $2.30 to trade at $1,251 per troy ounce.
"Pennant patterns tend to be continuation patterns," MacNeill Curry, the technical analyst at Barclays Capital, told Bloomberg News. "This breakout confirms the previous bull trend."
A pennant formation results when an asset's upper and lower trend lines cross, forming a triangle; if the assets begins trading above the trend line, technical analysts see it as a good sign.
Silver is less tightly correlated than gold with economic distress; while the yellow metal often rises when the news is bad, silver can break in either direction. Silver has many more industrial uses than gold, meaning that it can sometimes rise as a result of investment demand and sometimes as a result of genuine consumption by end users.
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