We spend a lot of time focusing on gold, however, its little brother silver is currently in a much more interesting situation from a technical perspective:
There is substantial promise in the silver chart:
- Strong support clearly exists around and just below the $19 level
- Bullish momentum divergence at the December low ($18.72)
- First time price moves above the 50-day simple moving average since October (indicative of a bottoming process with a potential fresh uptrend)
- Little resistance above $20.50 until the $21.50-$22 area
- Gold/silver ratio currently near 62 should see some reversion to the mean (around 55) this year
We are seeing some early buying coming into silver futures in Asia – $20.25 is an important short term level with the key breakout level at $20.50 just above: