Silver Chart 6 Oct 2009

Silver Chart 6 Oct 2009

A strong day for spot silver prices, which followed the gold price higher in a strong move, ending the trading session with a wide spread up candle which breached the $17 per ounce level once again, and closed marginally below the previous top reversal.  Whilst the two commodities gave a strong performance yesterday, there the similarity ends as technically the charts for gold and silver are very different.  Gold prices are, of course, breaking into new high ground, and therefore with no resistance ahead technically, this element of the analysis is no longer available to us as technical traders.  Silver on the other hand is very different, and once again is now running into an area of heavy congestion where the previous attempt to move higher failed with the shooting star candle of three weeks ago, and it will be interesting to see whether we see a repeat this time around.  However, given the power within the move and, in particular, the strength of the move in gold, this may be sufficient to see spot silver drive through this region this time, but the key for spot silver prices is now this resistance level which could once again prove to be a stubborn region to penetrate.  However, with gold surging ahead this may be academic with the precious metal dragging its industrial counterpart higher in the short term. Should we see this level breached then our longer term target of $18.50 per ounce and above seems more than achievable.

The outlook for spot silver in the short term is bullish, the medium term is sideways and the long term bearish.

Support : 16.87       Resistance : 17.46

Support:  16.26       Resistance : 16.72

Support:   15;78      Resistance : 16.15