Spot Silver Prices Daily Chart - January 22nd 2009

Spot Silver Prices Daily Chart - January 22nd 2009

Unlike gold, we saw spot silver prices gaining only 15 cents yesterday in a relatively tight range with the 14 day moving average providing support. The increase was probably supported by an upward move in daily crude oil prices and although we are now trading above the moving averages the silver market is at the same levels seen at mid December and early January. So the question is whether silver prices will continue to follow gold in the current economic climate?

From a technical point of view the first key area is the resistance at $11.75 and for any meaningful move, we require a breakout above this level, away from the consolidation of the last few weeks. If this breakout occurs then I would expect prices to move to the next significant level of resistance at $13.75, and a move beyond could see prices at $16.56, in the next few months. Whether this occurs will largely depend on two factors. Firstly, continued bullish momentum in spot gold prices, and secondly ( and perhaps more importantly ) a return to more stable trading conditions in the industrial sector with demand for silver returning as an industrial metal.
The short term trend is sideways, the medium term trend is bearish while the long term trend is bullish.

Support:    $11.050 (yesterday’s low)                                   Resistance: $11.600 (high of 09/01/09)

Support:    $10.964 (9 day moving average)                              Resistance: $11.540 (high of 06/01/09)

Support:    $10.663 (40 day moving average)                             Resistance: $11.510 (yesterday’s high)