Spot Silver Prices - Silver Price Chart 2nd June 2009

Spot Silver Prices - Silver Price Chart 2nd June 2009

Spot price silver was supported by a weak US dollar and firmer copper prices (the bellwether for base metals) in early trading with prices achieving a fresh high for the year at $15.90 per ounce.   However, a failure to break and hold above $16 resulted in silver prices losing 20 cents and eventually ending the day at $15.530 per ounce.   However, from a technical perspective the outlook for silver prices remains positive despite the fact that yesterday’s candle had a bearish tone with a deep upper wick and narrow body indicative of a “shooting star” candle, but one which was contained within the body of Friday’s candle as the open of yesterday was gapped down, so the candle carries less weight as such.  Despite this, however, and given that the gold chart has a neat shooting star at the top of the rally, we may see a modest pullback in silver prices today and possibly tomorrow as a result, which should therefore be viewed as opportunities for opening new longer term position trades, with a view to spot silver moving above the $16 mark and on towards our initial target of $16.45.  Silver prices should also benefit from the bullish tone of copper prices which since last week has seen the LME three month contract break through the $5,000 metric tonne price mark with analysts now the targeting $5,500 price point.

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

Support:    $15.460 (yesterday’s low)                                   Resistance: $16.210 (high of 08/08/09)

Support:    $15.130 (low of 29/05/09)                                   Resistance: $16.000 (psychological level)

Support:    $14.620 (low of 28/05/09)                                   Resistance: $15.960 (yesterday’s high)