Silver set to climb

SLV closed +0.5% @ 27.75. The daily charts are looking like Silver has built a short term floor, and a rally - at least to fill a few gaps, seems likely across the next week or two. What is clear, there will be very strong downward pressure at the SLV $30 level.


SLV, daily2

SLV, weekly

Summary

The precious metals have seen a very considerable decline in the past few weeks. A bounce does seem very likely..if only to reset the daily momentum cycle.

The 50 and 200 day MAs in the mid 29s will be key resistance for SLV
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*I am long SLV from the 27.70 level from Tuesday afternoon, seeking at least the low 29s.
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Metals fall sharply across February

Whilst the equity market pushed to new highs, the precious metals declined for a fifth month. Silver fell 9.5%, whilst Gold declined 5.0%. There is no sign of a turn/floor, and both Gold and Silver look set for further significant declines in March/April


GLD, monthly'1 - bearish outlook

SLV, monthly'1 - bearish outlook

Summary

It has to be said, in retrospect, the declines for the metals really are surprisingly severe. After a few intra-month attempts at a rebound, the metals continue a very steady decline.

Both metals are close to taking out their lows from summer 2012.

On balance, I can not expect last years lows to hold. Significantly lower levels seem likely.

Targets..

SLV 24/23
GLD 140/135

For SLV, a move all the way back to the August 2010 'Bernanke breakout'  - in the high teens now looks feasible..if not 'likely'.

For the Gold/metal bugs, the bearish chart outlooks listed above are nothing less than heresy.

Yet..the trend IS unquestionably lower.

One serious problem the metals are facing - not least as was seen today, is the strength in the US Dollar, which is now testing the USD 82 level. A move to the 88s, or even higher, would put further severe downside pressure onto the metals.

Metals rebounding

The metals snapped lower in the morning - perhaps spooked by the looming Bernanke testimony, but the declines sharply reversed, and both Gold and Silver closed significantly higher. The metals remain in very broad down channels though.


SLV, 60min

SLV, daily

GLD, daily

Summary

Despite today's snap back higher, the precious metals remain in very broad down channels.

SLV needs to break back into the 30s..and GLD needs the 161s.

Those targets are still considerably higher than current levels, and it could be some weeks before we see those broken - if at all.
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What remains key is that the summer 2012 lows really aren't that far below. If that support fails to hold - at ANY time, there will very likely be a massive snap move lower, and one that would likely spell further weeks..if not many months of decline.