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Spot Silver Prices – Current Silver Price 6th May 2009

Silver Spot Price - Daily Silver Chart 6th May 2009

Silver Spot Price - Daily Silver Chart 6th May 2009

Once again silver prices outperformed gold yesterday largely for technical reasons once spot silver prices managed to breach the late April high of $13.25 whereas gold failed to hold onto early gains.  In addition market commentators have suggested that silver prices may be gaining momentum as it appears to be undervalued compared with gold.  The gold silver ratio is currently around 70 but has averaged about 65 since the early 1980s.  From this experts have calculated that silver could average $14 in the third quarter and even reaching $16 by the fourth quarter.

From a technical perspective yesterday’s wide spread up bar on the back of dollar weakness and inflation worries closed at $13.33 per ounce, up 27 cents.  However, the candle closed looking a little “toppy” on the day but this slight weakness seems to have been discounted in this morning’s early trading with silver prices moving ahead once again and currently standing at $13.4350.  With all three moving averages now turning and adding support, and with the 9 day now crossing the 40 providing a strong bullish signal, we should see a continuation in this price move today, and my suggestion is as per yesterday and to look for small long trades on an intra day basis and to close out profits as soon as possible, given the background of important fundamental news in the next few days.  My only area of concern is at the $13.85 region which could provide temporary resistance to any move higher and as we approach this region we will need to be more cautious in our silver trading.

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

Support:    $12.980 (yesterday’s low)                                   Resistance: $13.900 (high of 23/03/09)

Support:    $12.812 (9 day moving average)                              Resistance: $13.755 (high of 26/03/09)

Support:    $12.675 (low of 24/04/09)                                   Resistance: $13.592 (yesterday’s high)