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Spot Silver 29 Nov 2010

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Spot Silver Chart 29 Nov 2010

Last week was a quiet one for spot silver which continued to hold above all four moving averages until late on Friday when the industrial metal just managed to breach the 14 day average to the downside thus ending the week at $26.66 per ounce.  This sideways price consolidation has continued in today’s silver trading with the metal regaining some of Friday’s lost ground as it trades back above $27 per ounce and attempts to hold above the 9 day moving average as well.  This picture of sideways price action now seems likely to continue in the short term given the uncertainty surrounding the euro and with the focus very much on currency and equity markets at present.  In addition we also have to contend with the traditional year end position squaring and general thin trading conditions which can lead to unexpected price spikes.  In the longer term the outlook for spot silver still remains firmly bullish and once we clear the $28 per ounce level this should then provide a strong platform of support which should see the metal continue to climb and develop its longer term trend and in due course move back above $29 in the first quarter of 2011.  The longer term moving averages remain fully supportive of this analysis with both the 40 and 200 day pointing sharply higher.