Spot Silver Prices - Daily Silver Price Chart 30th April 2009

Spot Silver Prices - Daily Silver Price Chart 30th April 2009

Spot silver prices rose with gold prices yesterday as the US dollar weakened, and consumer spending showed an increase, but all of this was against the backdrop of the GDP data which showed a weaker than expected result for U.S. first quarter gross domestic product, coming in at -6.1% compared to a contraction of -6.3% during the final quarter of 2008. Whilst the numbers may have helped weaken the dollar across the board, inside the report was perhaps a further sign that the largest elements of government, corporate and consumer spending were now spent, which provided the good news story for the broader markets.  The economic data helped spot silver outperform gold fuelling speculation of a faster recovery in global demand, particularly as silver is classified as an industrial metal and therefore more widely used in industry than gold. As is often the case ( and as I have mentioned several times before in various commentaries ) when commodity prices rise, silver will generally perform better than gold on a percentage basis, but as always the corollary is that when prices fall, the price of silver tends to move more dramatically than gold.

Technically silver prices closed the day on the silver chart with a wide spread up bar, but perhaps worryingly with a deep upper wick, which bounced off the 40 day moving average to close the day midway between this and the 9/14 day averages which have now converged, and with a 25 cents gain during the trading session. For any sustained move higher in silver prices we will need to see various elements combine, and in particular we need to see a break above the current congestion and resistance now in place between $12.75 and $13.25, coupled with a move through the 40 day moving average. Trading silver ( and other commodities) is extremely difficult at present given the markets perverse view of any fundamental news at present, and in addition for industrial metals such as silver, we also have the swine flu issue to consider and its impact on global markets. Should this become a pandemic then the effects could be far reaching across all markets, not least those dependant on any economic upturn such as silver. Indeed many analysts now believe that until the toxic asset issue is firmly dealt with, then further banking collapses may still be in the pipeline, and until this issue is firmly addressed and assets clearly identified any recovery may be short lived and fleeting.

My trading suggestion for spot silver today, as for gold, is to look for small profit opportunities trading long positions in the 15 minute and 30 minute charts, and with small profit targets intraday.

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

Support:    $12.390 (yesterday’s low)                                   Resistance: $13.010 (high of 03/04/09)

Support:    $12.169 (low of 08/04/09)                                   Resistance: $12.940 (high of 28/04/09)

Support:    $12.110 (low of 09/04/09)                                   Resistance: $12.820 (yesterday’s high)