Bank of America Closes Silver Short, Says Bearish Precious Metal View Was "Incorrect"
Yesterday it was Goldman capitulating on their near-term gold, er, capitulation reco (expectedly so after gold ripped over $75 in the span of 24 hours). Now, it is Bank of America's turn to close their silver short. To wit: "The Wednesday Bullish Candlestick formations (Bullish Engulfing Candles) in gold and silver say that our bearish view on precious metals now incorrect. Indeed, this is supported by the US $ breakdown and the increasingly constructive environment for risk assets generally. As such, we are cutting our Silver Short and moving to the sidelines. Silver should see a test of long term resistance at 24.24/26.23, in the sessions and weeks ahead while gold should re-test its 1433, August highs. In both cases, watch trendlines at 23.20 & 1375. A close above confirms the bullish candles and upside trajectories."
When was the trade put on? September 4. This was their justification then:
We have turned bearish silver following the series of intra-day impulsive declines from the confluence of long-term resistance between 24.78/24.97. It is now time to act. Initial downside targets should be seen to 22.44/31 (382% of the Jun/Aug advance and Aug-20 low), before making a push back toward 18.22.Sell Spot silver at 23.60, target 20.00, risking 24.55
What a difference two weeks makes. Below is the "technical" reason to make physical silver purchases more expensive:
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