Spot Silver Price Chart - Daily Silver Prices 27th April 2009

Spot Silver Price Chart - Daily Silver Prices 27th April 2009

Although silver is often described as gold’s poor relation it still remains a classic inflation hedge and safe haven whilst still behaving as an industrial metal as it is estimated that over half of the annual supply of silver is now used by industry in sectors as wide ranging as medicine and aerospace compared with only 11% for gold.  With continuing financial uncertainty and a combination of technical momentum and fundamentals silver prices moved higher on Friday gaining as much as 7 cents on the day and closing a tad under $13.   This move was also in part a response to Friday’s weaker dollar which is also helping to push up the price of other commodities.

From a technical perspective Friday’s candle closed above the 40 day moving average and added a fifth straight day of gains on the week adding to the bullish tone seen earlier.  This trend has continued in early trading this morning with silver prices opening significantly higher and, more importantly, gapped up (a rising window) which suggests that this momentum may well be sustained in the short term, given that we are now above the $13 per ounce level.   As with the price of gold on the gold chart, the weekly silver chart has given us a bullish engulfing signal, and therefore my trading suggestion for today is to look for small long positions on an intra day basis and buying into the market on any dips, with a stop loss marginally below the $12 per ounce price point.

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

Support:    $12.675 (Friday’s low)                                      Resistance: $13.265 (high of 31/03/09)

Support:    $12.550 (low of 14/04/09)                                   Resistance: $13.175 (high of 01/04/09)

Support:    $12.300 (low of 23/04/09)                                   Resistance: $12.943 (Friday’s high)