Spot Silver Price Chart - Daily Silver Prices 17th July 2009

Spot Silver Price Chart - Daily Silver Prices 17th July 2009

Despite managing to close marginally above the $13.00 per ounce price handle spot silver prices were restricted to a very narrow trading range as the markets try to decide whether the recent renewed optimism in equities is simply smoke and mirrors or the start of a sustained recovery.  This uncertainty can be seen clearly on the S&P 500 chart where both the bulls and the bears are claiming that the head and shoulders pattern is working in their favour.   Market players who dismiss technical analysis completely claim that in effect both the bulls and the bears see what they want to see, and the chart is merely confirming their own prejudices.  Yesterday’s candle on the silver chart failed to provide any follow through from the strong move higher of Wednesday and the only positive one can take from yesterday’s doji candle is that the open and close managed to remain above the 14 day moving average which also seemed to provide some support to the low of the day.  Whether this is the beginning of a sustained move higher or simply a small market correction in a deeper move, only time will tell.  As outlined in yesterday’s market commentary there is still a huge amount of clear water between the current price and the 40 day moving average, and until we silver prices climb and hold above this technical indicator coupled with a breach of the strong resistance in the $14.00 per ounce level, then I would suggest then any move higher may only be temporary and based on technical factors and triggers along.  With traders likely to be squaring positions ahead of the weekend and with little in the way of fundamental news due for release today, the trading range may well be narrow and restricted around the current price point. Overall spot silver finished 2 cents higher at $13.300 per ounce.

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

Support:    $13.130 (yesterday’s low)                                   Resistance: $13.592 (high of 05/05/09)

Support:    $13.040 (low of 07/07/09)                                   Resistance: $13.447 (high of 06/07/09)

Support:    $12.880 (low of 15/07/09)                                   Resistance: $13.335 (yesterday’s high)