Spot Silver Daily Price Chart - January 20th 2009

Spot Silver Daily Price Chart - January 20th 2009

The spot silver price declined only marginally yesterday on the back of a strong US currency, but it performed better than spot gold. Fundamentally, silver is considered to be in a very favorable position being a cheap alternative to gold for investors looking for safe haven with limited above ground supply. At the same time, the fact that most silver is obtained as a byproduct in base metals mining, which have seen production cuts lately, will inevitable lead to less production for the white metal as well. In the short term of course deflationary selling pressure is making an impact. One of the key issues moving forward will be whether spot silver prices continue with their traditional relationship with gold, or alternatively correlates more closely with other commodity base metals such as zinc and copper. This will be one issue to watch in the next few months, as fundamentals become increasingly important in the current economic climate.

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

Support:    $10.950 (low of 09/01/09)                                   Resistance: $11.600 (high of 09/01/09)

Support:    $10.926 (9 day moving average)                               Resistance: $11.540 (high of 06/01/09)

Support:    $10.770 (low of 08/01/09)                                    Resistance: $11.320 (yesterday’s high)