Silver Chart - Daily Candlestick Chart 31st March 2009

Silver Chart - Daily Candlestick Chart 31st March 2009

Worries about the auto sector in the US have been cited with contributing to the fall in the price of  spot silver.  As I am sure you are aware silver is now classified as an industrial metal whereas gold is still classified as a precious commodity, and therefore silver prices are more sensitive to the economic climate and, in particular, to problems in major sectors such as the automobile industry which are headline news in the US at the moment.  The car industry in general is a major consumer of silver where it is used in a variety of processes and finished products from other suppliers.   Yesterday’s wide spread down bar reflected the current uncertainty in this industry and the likelihood that President Obama’s bailout package will actually be successful in saving these giant companies longer term.  Having said that in the context of the fall in the Dow and the bad news surrounding the auto industry the fall in the price of silver was relatively modest which bodes well for the longer term.

Technically, the price of silver  finished 22 cents lower, even dipping below the $13.00 mark to settle at $13.050/oz with the chart now showing a market level below the 9, 14 and 40 day moving averages.   This downside momentum has pushed silver prices back into the support area between the $12.50 and $13.00 region and this needs to be breached for there to be a retest of support at $12.65.

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

Support:    $12.910 (yesterday’s low)                                   Resistance: $13.590 (high of 27/03/09)

Support:    $12.861 (low of 05/03/09)                                   Resistance: $13.410 (high of 09/03/09)

Support:    $12.700 (low of 02/03/09)                                   Resistance: $13.360 (yesterday’s high)