Last week the price of the white metal (COMEX:SIU13) climbed to an over two-week high after U.S. Federal Reserve Chairman said its huge stimulus program would stay in place for some time. Investors are now focused on Ben Bernanke once again.
"The main focus is Bernanke's testimony to the Congress, and that should really give us more guidance to whether tapering will start in September or December," Danske Bank analyst Christin Tuxen said.
Could this above-mentioned event trigger a breakout above the important resistance level? Or maybe the worst is not behind us and we will see further declines in silver?
Recently, there has been much talk about gold’s price. This has pushed silver a little bit to the side, which we don't think is quite fair. Because of that, we devote our today‘s analysis solely to the white metal. Let’s take a look at the charts and find out what's the current outlook for silver.
Today we will start with the analysis of the silver long-term (charts courtesy by http://stockcharts.com).
Click to enlarge.
In this week’s very long-term silver chart, we have a situation somewhat similar to what we saw happen with gold last week. Silver also moved higher and attempted to move above the declining resistance line, finally closing right at it (a few cents below the $20 level) without breaking it.
Technically, at this time we have no breakout, so the situation remains bearish (even the short-term trend). The downtrend will remain in place here unless silver can increase and hold a breakout above the $20.70 price level (this is a short-term resistance level based on the intra-day highs).
In the recent days we haven’t seen such action. Therefore, in our opinion last week’s rally was nothing more than a contra-trend bounce.