Silver Spot Price Chart - Daily Silver Prices 24th April 2009

Silver Spot Price Chart - Daily Silver Prices 24th April 2009

Spot silver closed sharply higher yesterday on the back of the rally in spot gold prices as investors renewed their flight to quality and safety.  The move was in part driven by a both a weaker dollar and a decline in the stock market as underlying worries about the economy and the results of bank stress tests resurfaced.  From a technical perspective yesterday’s up bar closed marginally below the 40 day moving average and partially breached the resistance at $12.80 per ounce and beyond which could provide a barrier to any move higher in the short term.  For any comfortable longer term trading we need to see this region breached with some momentum coupled with a move above the 40 day moving average, and in early trading this morning we are seeing silver prices once again toying with this particular average.  Following on from yesterday’s market commentary in which I suggested small long positions with tight stop losses, I would advocate the same today and to lock in any profits from yesterday’s trading.  Please also bear in mind that with the weekend ahead we could see traders squaring positions today ahead of the market close so take care before opening any new positions.  In addition we also have a G7 finance ministers meeting over the weekend, and whilst market analysts generally agree that there will be little news to spook the market it pays to take a cautious view.

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

Support:    $12.300 (yesterday’s low)                                   Resistance: $13.000 (psychological level)

Support:    $12.110 (low of 09/04/09)                                   Resistance: $12.940 (high of 15/04/09)

Support:    $12.028 (low of 07/04/09)                                   Resistance: $12.877 (yesterday’s high)