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Silver Market Update

By: Clive Maund

-- Posted 7 September, 2009 | | Discuss This Article - Comments: Source: SilverSeek.com

Silver has made strong gains over the past couple of weeks as gold has broken out upside from its Triangle, but this rapid progress has resulted in it arriving once again at the important resistance level in the $15.90 - $16.40 area in a critically overbought condition. It therefore stands to reason that it is likely to react back or at least consolidate before significant further gains can be made, especially as the Commercials were piling on the shorts last week - and this is only what we know about as the data is only available up to last Tuesday's close, and it is fair to assume that they rose to even higher levels as silver rose sharply later in the week.

Silver is therefore expected to react back next week, and possibly for somewhat longer, and if it does so we can expect many traders to be rattled by it. However, we will view it as a buying opportunity, provided that gold does not react back below the apex of its Triangle, which would be trigger a general sector sell signal. With gold expected to go on to break out to new highs and advance rapidly to the $1300 area, silver should proceed to break out above the resistance in the $16 area and advance to challenge its highs in the $21 area in due course.

-- Posted 7 September, 2009 | | Discuss This Article - Comments:

Web-Site: www.clivemaund.com
Contact Clive Maund - clive.maund@t-online.de

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Clive Maund - Archive List

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