Silver Chart - 13th April Daily Spot Silver Prices

Unlike the spot gold price spot silver has performed marginally better in early trading this morning to the extent that it has temporarily managed to breach the 9 day moving average.  With most of Europe closed for the Easter break we will have to wait until the open of the US equity markets for some clues as to the future direction of the metals market.  In many ways the technical picture is very similar to gold in that the close of last week finished below all three moving averages adding a decidedly bearish tone to the short term outlook.  The key for spot silver is the strong resistance now immediately above and for any return to the bullish momentum of February and early March we will need to see this breached with a degree of strength.  A break through the $12.78 region followed by a break above the $13.55 level would open the way to a move back to retest the $14/ounce and above area.  The issue for silver, as always, is the dichotomy between its industrial use and perception as a precious metal.  Should the earning season provide a degree of bad news this could trigger a fall in silver prices, but this could be offset by the counter balanced view of a flight to a safe haven status.  If the earning season is bad, and gold is seen to benefit, then this in turn could pull silver prices higher, which are often seen as the cheaper, but equally safe alternative investment to gold.

Indeed since January the iShares Silver Trust, the largest silver-backed exchange traded fund listed in New York, has increased its silver deposits by more than 20% taking it to a record 8,413 tonnes.  This compares with a more than 40 per cent rise in the SPDR Gold Trust, the world’s largest gold-backed exchange traded fund, with holdings near record highs of 1,127 tonnes.  According to Adrian Koh, analyst at Phillip futures:  “Some people may be slightly more positive on silver to outperform gold on strong investment demands.”

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

Support:    $12.405 (high of 09/04/09)                                  Resistance: $12.812 (high of 06/04/09)

Support:    $12.169 (low of 08/04/09)                                   Resistance: $12.663 (high of 30/01/09)

Support:    $12.028 (low of 07/04/09)                                   Resistance: $12.560 (low of 02/04/09)