March 1 (Bloomberg) -- Silver may extend this year’s 7.6 percent drop as it nears a bear market, according to technical analysis by Commerzbank AG.
The metal slid to $27.975 an ounce in London today, the lowest since Aug. 20. A close at $28.007 would be a 20 percent drop from Oct. 4, the common definition of a bear market. A slide below $28.26 in the next few days would mean the June 2012 trough of about $26.11 would “be back in play,” Commerzbank said in a Feb. 26 report.
“While silver stays below its January high at about $32.51, we will retain a bearish stance,” Axel Rudolph, an analyst at Commerzbank in London, wrote in the report.
Silver for immediate delivery traded at $28.04 by 11:14 a.m. in London and has underpeformed platinum, palladium and gold this year. It slid 9.3 percent last month, the most since May. Still, its 14-day relative strength index is at 28.8, below the level of 30 that indicates to some analysts who study technical charts that a rebound may be imminent.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.
--Editors: Claudia Carpenter, Nicholas Larkin