Gold hits the headlines but the real action is in its sister metal and one time king of the currency world. Silver gives traders leveraged access to gold. In simple terms, it's cheaper to buy contracts, you get more bang for your buck, and the returns on capital are greater. This is an alchemist's opportunity to turn silver into real gold.



Silver has several characteristics which help to understand the potential for future price behavior. The first characteristic is the fast rise in August and September this year. This was a rapid uptrend breakout moving from $28 per ounce to $35. This gives a 25 percent return. For the same time, gold gives a 10 percent return. Silver moves more rapidly, and the profit is larger.

The second characteristic is the resistance level near $35. This has been a strong support and resistance level. It was a support level in May and July 2011. It was a resistance level in November 2011 and February 2012. A successful breakout above $35 has an upside target near $43. A move above $43 has the next upside target near $50.

The third characteristic is the clearly defined trend changes. The trend are easily defined using a trend line. The fast uptrend was defined by trend line A. The downtrend defined by trend line B. The current uptrend is defined by trend line C. A move above or below the trend line gives a reliable signal of a change in the trend. This allows traders to establish reliable entry points and to set effective stop loss points. The trend behavior is more clear than gold.