Considering what happened to gold and the dollar last week silver held up well, finding support at its 200-day moving average and a little above an important long-term trendline. However, it wouldn’t take much more pressure for this support to crack leading to a swift move down towards support in the $6 area. Silver is a speculative, volatile and possibly highly manipulated market, for this reason, as previously stated, trendlines are not viewed with the same reverence as would otherwise be the case - in other words, failure of this trendline would not necessarily mean “game over”. What will be important to observe should it break down towards $6, is where gold is at that time - if gold has succeeded in remaining above $400 and goes on to stabilize above this level, it will be good news for silver.
It will of course be positive silver can hold up above the long-term trendline, and a break above the 50-day moving average, which is currently pressuring the price lower, and the resistance around $7 would clearly be bullish developments. However, with the dollar looking set to move higher short-term this looks unlikely in the near future.
