Spot Silver Prices - Daily Silver Chart 29th April 2009

Spot Silver Prices - Daily Silver Chart 29th April 2009

Spot silver prices too fell sharply yesterday falling 44 cents to finish at $12.43 per ounce on fears concerning the economic consequences of a swine flu pandemic.  In percentage terms spot silver fell more heavily than the price of gold which is often the case in a bearish move, and the opposite tends to occur in a bullish move with silver then outperforming gold.  The fall was also partially attributable to a hangover from the previous day and to some extent was catching up with the fall in the price of gold.  From a technical perspective yesterday’s wide spread down bar came as little of a surprise following on the back of the gapped up down bar of Monday, always a strong bearish signal and replicated in the gold chart with a dark cloud over pattern, reinforcing this view on the silver chart.  Prices duly fell through both the 40 day and the 14 day moving averages but stopped just short of the 9 day moving average which seems to have provided a degree of support preventing the price of silver falling further.  However, unlike the gold chart there is little in the way of support immediately below the current price point either in the recent trading sessions or even further back.

Indeed we need to look back as far as December 2008 to find a concentrated level of support at $11.50.  Given this
scenario, should we see a further break lower not only could prices fall to this region but they could also fall much more quickly than gold.   My analysis of the gold chart would suggest that we may be seeing a re-basing of the precious metal in the $895 per ounce but this is very tentative at this stage and as we can see from the above there is little in the silver chart to suggest the same is happening.  Given the above my suggestion for today’s trading is to look for small long positions intra day (largely based on my gold analysis) in the 15 and 30 min charts aiming for small profit targets and using a tight stop loss.

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

Support:    $12.340 (yesterday’s low)                                   Resistance: $13.240 (high of 27/04/09)

Support:    $12.169 (low of 08/04/09)                                   Resistance: $13.010 (high of 03/04/09)

Support:    $12.110 (low of 09/04/09)                                   Resistance: $12.940 (yesterday’s high)