Silver Chart 25th May 2009

Silver Chart 25th May 2009

Spot price silver tracked the price of gold higher on Friday, reaching a fresh high for 2009 at $14.830 per ounce, its strongest level since August 2008.  Spot silver prices were undoubtedly boosted both by a weakening US dollar and a stronger rebound given the extent to which silver prices fell last year.  The disconnect in gold and silver prices is such that although gold prices are now around 7% below their March 2008 peak, spot silver is still around 30% below the March 2008 high.  From a technical perspective Friday’s candle closed above the resistance outlined in Friday’s market commentary at $14.45 suggesting that we are now in a position to see a longer term bullish rally in silver prices with very little in the way of resistance on the silver chart until we reach the dizzy heights of $16.40 per ounce which is now clearly in our sights.  As today is a national holiday both in the US and the UK my trading suggestion for today is to wait until the markets are open tomorrow and at the point start to look to build long term bullish positions to take advantage of the likely trend in silver prices moving forward.

The short term is sideways while the medium and long term is bullish.

Support:    $14.400 (Friday’s low)                                      Resistance: $15.110 (high of 14/08/08)

Support:    $14.060 (low of 22/05/09)                                   Resistance: $14.940 (high of 13/08/08)

Support:    $13.970 (low of 18/02/09)                                   Resistance: $14.830 (Friday’s high)