Spot Silver Price Chart - Current Silver Prices 3rd July 2009

Spot Silver Price Chart - Current Silver Prices 3rd July 2009

Silver’s reaction to the Non Farm Payroll data was somewhat more dramatic than that of spot gold and certainly paints a more bearish picture from a technical perspective, which is interesting, as there seems to be some divergence between the two metals which has been revealed in the last couple of weeks.  If we consider the silver chart first; yesterday’s wide spread down bar added to the bearish sentiment following Monday’s “shooting star” doji candle which signalled the start of this week’s fall in spot silver prices.  With both the 9 and 14 day moving averages now weighing heavily above and with the 40 day having crossed and started to turn, this is most definitely a bearish picture and somewhat at odds with that of gold.  Of particular significance is the 9 day moving average which now seems to be providing a serious barrier to any attempt to rise, and indeed we saw this again in yesterday’s candle.  The gold chart, on the other hand, whilst bearish in flavour, certainly differs in that the general price move is one of sideways direction but certainly not indicative of a likely reversal lower.   A reason for the apparent breakdown in the traditional, positive correlation between gold and silver is most likely due to the fall in equity markets combined with silver’s dual role as both an industrial and precious metal, of which the former seems to be weighing more heavily at present.  As a consequence spot silver touched the 6th May low of $13.280 per ounce and eventually closed at $13.40 per ounce.  With the US market closed for the 4th of July celebrations leading to very thin volumes we may see some random sideways price action on the silver chart today.

The short term trend is bearish, the medium term trend is sideways while the long term trend is bullish.

Support:    $13.280 (yesterday’s low)                                   Resistance: $14.380 (high of 19/06/09)

Support:    $13.250 (low of 06/05/09)                                   Resistance: $14.140 (high of 30/06/09)

Support:    $12.980 (low of 05/05/09)                                   Resistance: $13.800 (yesterday’s high)