Tags: Vialoux | silver | seasonal | buy

Horizons Investment’s Vialoux: Seasonal Buy Window Arrives for Silver

Friday, 04 Jan 2013 08:01 AM

By John Morgan

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A calendar “sweet spot” for seasonal strength in silver has just begun, Dan Vialoux, a research analyst for Horizons Investment Management, writes in an article for The Globe and Mail.

Silver often experiences price gains from the end of December to the end of February, Vialoux said, based on research figures compiled by Equityclock.com. This calendar trade has been profitable in 12 of the past 17 periods, including nine of the past 11 periods.

The average return per period during the past 17 periods was 12 percent, Vialoux said.

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“Seasonality in silver is influenced by an increase in industrial demand during its period of seasonal strength,” he wrote.

About 40 percent of silver is used in solar batteries, water purification systems, cellphones, circuit boards, plasma televisions and radio devices.

“Growth in excess of 10 percent per year is expected to continue by these sectors,” Vialoux predicted.

Silver recently traded at $30.34 per ounce. Silver-related exchange-traded funds (ETFs), trust units and equities are showing “early signs of bottoming, but have yet to show signs of acceleration,” according to Vialoux.

He noted that silver recently found support at $29.64, near the top of its previous trading range, but that it also remains in an intermediate downtrend.

“A move above its 20-day moving average is expected to trigger technical and seasonal buying,” Vialoux wrote.

The most actively traded silver-related security is the iShares Silver Trust. Vialoux also mentioned Sprott Asset Management’s Physical Silver Trust and the Global X Silver Miners ETF.

Actively traded silver-related stocks include Pan American Silver, Silver Wheaton, Hecla Mining and First Majestic Silver Corp.

Meanwhile, Investors Business Daily reported gold and silver prices are being influenced by the limited fiscal cliff deal in Washington and Federal Reserve policy.

“The deal they struck was shocking. We will add $4 trillion more in debt with no real budget cuts,” Terry Sacka, chief strategist at Cornerstone Asset Metals in Palm Beach Gardens, Fla., said in an email.

“This along with the Fed printing a trillion over the next year of new money makes the outlook clear: The U.S. will continue to debase the dollar, which will certainly lead to higher gold and silver prices.”

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