Silver Price Chart - 3rd April 2009 Daily Candlesticks

Silver Price Chart - 3rd April 2009 Daily Candlesticks

An interesting day for spot silver prices yesterday, with the price of silver falling initially, only to recover later, and close only marginally down on the day, which was very different to gold, which closed the day on a wide spread down bar. The difference between the two metals can largely be explained by their different roles in the market. Gold is seen as a safe haven status metal, and with the steep rise in the equities, on the back of the statement following the G20 meeting in London, investors preferred to put their money into the stock market, rather than invest in gold. Silver, on the other hand is seen as industrial metal, and therefore the rise in equities was seen as positive news for silver prices, with a consequent recovery in the evening session. On the day, this left us with a ‘hammer candle’ with a long lower wick, and once again bouncing off the support level at $12.55, which now seems to be firmly established. Coupled with the bounce on Tuesday, and the support level that now seems established, we should see a move higher in due course, although this view must be tempered with the fact that prices are still below all three moving averages, and therefore before we can be certain of any rise, we will need to see two things happen. First we will need to see a break above the resistance now in place at the $13.55 and above, and secondly we will need to see prices move back above the moving averages. My view therefore remains the same, that in the short term we are likely to see further sideways movement in the next few days, followed by a return to the bullish momentum established earlier in the year. The only word of caution is that should the equity markets see the G20 meeting for what it was – some empty words, a few headlines, and little action – then this may have a negative impact on silver in the short term.

Remember that as this is the first Friday in the month, we have the NFP figures due out later, which following the ADP numbers on Wednesday, are likely to be bad, then this could affect both the stocks markets and the US dollar negatively which in turn will have a knock on effect for silver prices, so today could be volatile and unpredictable.

The short term trend is sideways while medium and long term trends are bullish.

Support:    $12.890 (yesterday’s low)                                   Resistance: $13.360 (high of 30/03/09)

Support:    $12.600 (low of 31/03/09)                                   Resistance: $13.257 (high of 31/03/09)

Support:    $12.490 (low of 11/03/09)                                   Resistance: $13.010 (yesterday’s high)