Silver has been the on the receiving end of the risk aversion trades and as noted in a previous post has been badly lagging gold in terms of performance.
It ended last year (2010) at $28.01. As of this writing, it is currently trading near $27.74, down, but just barely on the year. Compare that to Gold which is currently trading near $1547, and remains up for the year at about 8% or so.
This being said, Silver had held on the charts exactly at the former spike low near the $26 level which it made after plunging from near $45 in late September of this year. This is a key level which needs to hold to prevent deeper losses which could threaten to take the metal down closer to $21 - $20 before it would bottom. Today's performance by the bulls, in bringing the metal sharply off its session low, is an outstanding effort. However, to get out of the woods and move past the danger stage, they now need to take the price ABOVE $30 and hold it there. That would confirm a bottom on the chart. It would not however confirm a bull trend is about to emerge but only that the severe selling has run its course. To get a solid uptrend signal, the grey metal woudl need to take out $35.50 on a weekly closing basis.
We'll see what we get in tomorrow's trading session to end the year. Perhaps the bulls can push the metal into the plus column for the year. That would take a close over $28. Let's see if they are up to the challenge.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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