Spot Silver Price Chart - Daily Silver Prices 23rd April 2009

Spot Silver Price Chart - Daily Silver Prices 23rd April 2009

With investors once again becoming worried about the structural stability of the financial sector and stress test results due out very soon the price of silver duly tracked the gold price and rose an average of 39 cents on the day to settle at $12.43 an ounce.  Prices also benefited from a marginally weaker dollar.  From a technical perspective yesterday’s wide spread up bar on the silver chart closed and held above both the 9 and 14 day moving averages which have subsequently crossed giving us a mildly bullish signal for today.  However, several factors need to be considered very carefully before rushing in and opening any new positions.  First, since mid February we have had a series of lower highs and lower lows suggestive of a downward trend and the candle of yesterday, or indeed of the last few days, does not suggest that this trend has been reversed at present.  Secondly, for any sustained move higher we will need to see a break above the strong resistance now in place between the $12.50 and $13.50 region, coupled with a break above the 40 day moving average.  If these elements do combine then we could consider that the bullish momentum of late February and early March has now been re-established for silver prices.  If, and until, this happens we need to be cautious in our silver trading and look for intra day positions with small profit targets and tight stop losses, and based on my analysis in the spot gold market I would take the same approach for spot silver and look for small long positions today.

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

Support:    $11.980 (yesterday’s low)                                   Resistance: $12.810 (high of 16/04/09)

Support:    $11.882 (low of 21/04/09)                                   Resistance: $12.663 (high of 30/01/09)

Support:    $11.790 (low of 17/04/09)                                   Resistance: $12.450 (yesterday’s high)