December silver traded flat yesterday, with the equity markets down significantly ahead of Friday’s payroll number. Silver also didn’t see any lift by way of flight to quality trading. Looking at the weekly chart below, the last two weeks corrective rally has come to a bit of a slowdown as the market is trying to find fresh news before taking further direction. Additionally, short covering type of trading is likely with silver with the market hitting a two-year low, a technical improvement is showing on the charts; it is expected that further gain in silver may be possible as long as silver holds above 14.20.
In the my last article, I mentioned that the gold/silver ratio is at a 25-year high, with gold worth about 85 times more than silver. Due to that fact alone, it could interest some silver speculators to want to own silver at these levels.
From the technical perspective, silver is fighting to hold above 14.00. For now, a close below 14.20 will signal further weakness. From current levels of 14.60, mid 15.00 is likely if the market manages to stay above last week’s low of 14.20.
Silver Weekly Chart