Silver Market Update

By: Clive Maund | Tue, May 16, 2006
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The jury has returned its verdict - "Silver has double-topped with its April highs". So silver bulls can forget about any new highs for a while. Although silver has powerful bullish forces underpinning it, the same factors that are set to precipitate an intermediate reaction in gold, principally a rally in the dollar, are expected to have a similar effect on silver, although due to the strength of the bullish forces at work in silver, it is considered more likely that a trading range will develop, lasting perhaps several months.

On the 6-month chart we can see the phoney break higher on Thursday, that failed to take the price well clear of the April highs, and the reaction on Friday that accelerated dramatically today, as the metals had the rug pulled out from under them by today's snapback rally in the dollar, mentioned as a growing probability in the big article on the site at the weekend.

Given the severity of today's drop, especially in gold, it is quite likely that we will see a minor rally over the next day or two, which traders should use to sell, with a view to repurchasing in the $12 area, where there is strong support bolstered by the proximity of the 50-day moving average.

 


 

Clive Maund

Author: Clive Maund

Clive Maund,
CliveMaund.com

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maunds opinions are his own, and are not a recommendation or an offer to buy or sell securities. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

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