Every investor has been tracking Gold price for several weeks now. The Bullion is the only asset that appears to be a safe haven in those trouble times, but what about the two other main precious metals, Platinum and Silver? Prices for those two metals have jumped back since the lows posted in last October, but at a much slower pace than Gold. This is something that smart investors know: Gold is always the driver. It means that mechanically Platinum and Silver prices should replicate the recent surge on Gold prices.

Between March and October 2008, Silver prices (blue line) declined by 55% but bounced back by 47%. The bearish configuration seems to be over and the medium-term price action may be a continuation of the rebound. Right now the overbought market triggers technical sell orders that pushed prices lower. From a high of $14.60 on February 20, the current price is now at $12.71and should correct further down towards $11.50. It’s a previous high posted twice (points A and B on the chart) that is likely to become a new low because considered as a new entry point for investors.

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The rebound has been even slower for platinum prices (black bars) as they fail to breakout above the first Fibonacci retracement level of the broad decline occurred between June and October 2008 (points C and D). Despite the momentum is positive (MACD, moving averages crossovers, Momentum technical indicator…), the market was overbought (ellipses on the RSI) and the presence of the first Fibonacci resistance has impeached a further momentum. The recent momentum is supported by the 25-day moving average.

The next few days may be a continuation of the downward correction for both precious metals. However the medium-term remains positive. The replication of the Gold price action with a time interval is more than probable. The key factor for this scenario?

If Gold breaches above $1,000! In this case Silver should jump the previous low price of $17.00 and Platinum towards $1,500, which is the 50% Fibonacci level.