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The 70s pattern for silver is very similar to the pattern that currently exists. Therefore, I do not
think it is wishful thinking that silver will reach the target of $675 as a minimum. Now, you have an opportunity to go back in time to 1978, without a “time-machine,” and make a similar but bigger gain…
The comments above and below are excerpts from an article by Hubert Moolman(hubertmoolman.wordpress.com) which has been edited ([ ]) and abridged (…) to provide a faster and easier read.
Silver, even more than gold, is the opposite of what is considered a monetary asset (debt, like a federal reserve note), today. This is mainly because silver has been completely demonetized, whereas gold is still a part of the current system (think central banks gold reserves). When the illusion of money (value) is exposed for what it is (worthless paper or digits), then people will demand real money (value) like silver and gold. We are on the cusp of that event, and that is when the ridiculous prices for silver and gold become a reality, until it is not traded in any of the fiat currencies at all.
Below, is a silver chart (from barchart.com) that goes back to 1999. On the chart, I have highlighted a period that is the end part of a longer pattern that goes back to 1980.
silver current pattern
The pattern takes the form of a cup and handle pattern, with the cup starting in 1980 (out of view), and the handle starting at the top in 2011. We are getting closer to the explosive part of the pattern, with the best performance likely when silver prices go higher than the $50-level.
The expected target, based on the standard movement of such a pattern, can be calculated as follows:
- The movement from the bottom of the cup in 2001, was from about $4 to about $50 in 2011 (note: there was a lower low in 1991, but I ignored it for comparison sake). This is a 12.5 (50/4) fold increase.
- Therefore, the target for this pattern would be a similar move from the $50 level, so that would be a minimum target of $50 + ($50 x 12.5) = $675.
…[The above minimum target of $675.ozt. for silver] is not some hopeful target. It is very realistic, since it has a historic precedent [see below].
Below is a silver chart from about 1966 to 1979. I have marked the chart in such a manner, to show how it is similar to the current pattern (the first chart). For example, the high in 1974 (at $6.7) is similar to the 2011 high (at about $50).
Silver 70s Pattern
If you were around in 1978, and decided that this was a cup and handle-type pattern, you could calculate a target as follows:
- The movement from the bottom of the cup in 1971, was from about $1.288 to $6.7 in 1974. This is a 5.2 (6.7/1.288) fold increase.
- Therefore, the target for the pattern would be a similar move from the $50 level, so that would be a minimum target of $6.7 + ($6.7 x 5.2) = $41.54.
In 1980, price did eventually go as high as the target and higher to $50. It would have been difficult to sell at $50, since it was not there for very long, so the prudent target of $41.54 would have been a good exit point.
Conclusion
As you can see, the 70s pattern is very similar to the pattern that currently exists. Therefore, I do not think it is wishful thinking that silver will reach the target of $675 as a minimum. Now, you have an opportunity to go back in time to 1978, without a “time-machine,” and make a similar but bigger gain…
For more of this kind of fractal analysis, you are welcome to subscribe to my premium service. I have also recently completed a Silver Fractal Analysis Report as well as a Gold Fractal Analysis Report. You can also subscribe to this blog (enter email at the top right of this page) to get my latest free gold and silver updates.
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Disclosure: The above article has been edited ([ ]) and abridged (…) by the editorial team at 
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