Spot Silver Price - Daily Silver Chart Prices 26th June 2009

Spot Silver Price - Daily Silver Chart Prices 26th June 2009

Spot silver prices were pulled a little higher yesterday by a rise in the price of spot gold as well as a wobble from the US Dollar and they ended the day 22 cents higher to settle at $14.082 per ounce.  As outlined in yesterday’s market commentary for silver we are beginning to see some subtle shifts in the correlation between markets and instruments and indeed in the last few days the daily price move between gold and silver has been less pronounced than of late, suggesting that whilst this correlation is still in place it is less strong than it has been in the past.  In addition the relationship with the US Dollar also appears to have loosened, and silver prices may now be tracking the price of copper, which is seen by the market as the bellwether for both the economy in general and, more importantly, industrial commodities as we move out of recession.  With silver perhaps now perceived more as an industrial metal than a precious one, this relationship may prove to be more influential in the next few months rather than the one with gold.  This is not to say that the relationship with gold has broken, it is simply that the complex patchwork of markets, assets and financial instruments is creating a more diverse inter-dependency than simply one between “precious metals”.

From a technical perspective yesterday’s price move suggested a return of mildly bullish tone to the silver chart, although with no strong reversal signal the tone is perhaps more muted than in the gold chart.  The high of the day finished fractionally below the 9 day moving average but with the 14 day now crossing the 40 day this is adding to the bullish mood, which was further enhanced by the close finishing above the resistance level in the $13.90 per ounce region.   Any price move higher today may be cautious and my suggestion for trading (given that it is the weekend) is to look for small long trades using the 5 min chart with tight stop losses and aiming for small profit targets.

The short term trend is mildly bullish, medium term trend is sideways while the long term trend is bullish.

Support:    $13.790 (yesterday’s low)                                   Resistance: $14.380 (high of 19/06/09)

Support:    $13.600 (low of 23/06/09)                                   Resistance: $14.220 (high of 22/06/09)

Support:    $13.410 (low of 20/03/09)                                   Resistance: $14.100 (yesterday’s high)