By Nicholas Larkin Feb. 24 (Bloomberg) -- Silver, the worst-performing precious metal this year, may drop as much as 11 percent to $14 an ounce, according to technical analysis by Barclays Capital. The attached chart shows prices formed a so-called “head and shoulders top” and then failed to hold above a 27-month pivot line, which the bank says is a bearish signal. The second chart shows a drop to about $14 would equate to a 50 percent retracement of the metal’s advance from October 2008 to December last year, according to a series of numbers known as the Fibonacci sequence. “The failure to hold the push through the $15.99/$16.33 pivot zone maintains the 2 1/2-month downtrend,” Barclays analysts including Jordan Kotick wrote in a report. “Against a move through the head and shoulders neckline at $17.32, we look for a push to $13.97/$14.” Silver traded at $15.7275 an ounce at 10:36 a.m. in London. The metal declined 6.8 percent this year after advancing 48 percent last year. Prices slipped to a five-month low of $14.64 on Feb. 5. In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net.

Source