Spot silver extended its recent bullish rally again yesterday ending with a wide spread up candle which finally took the commodity back above $30 per ounce, a price last seen back in early January which saw silver prices fall to a low of $26.37 per ounce on the 28th January 2011. At this point the 100 day moving average proved to be the key technical area with the commodity bouncing off this level and providing the platform for the recent return of bullish momentum which now seems set to extend further provided we see a break and hold above the $31.23 high of Jan 3rd 2011. To add further to this short term bullish picture the 9 day moving average is now crossing the 40 day, giving us a further bullish signal, whilst the 14 day provided strong technical support last week during the rally. With all the moving averages now pointing firmly higher and with the key 200 day also slanting upwards expect to see the rally for silver continue and once we breach the $31.30 area then this will provide a further platform of support for a continuation of the longer term bull trend.
Meanwhile the picture for gold is slightly different and certainly less bullish for the precious metal and the reason for this is simple as we now have a clearly defined triple top on the daily chart in the $1430 per ounce region and for a long term bull trend to develop we will need to see this region breached. However, we cannot underestimate this significant price region on the daily chart which may prove to be a defining area in any longer term trend. In the short term we can expect to see further strength in gold and a break and hold above the 40 day moving average in the $1368 region should provide further momentum to the upside. This short term bullish picture is further supported by the 9 day moving average which has crossed above the 14 day to give us a bull cross signal. Finally, the 200 day average continues to slant higher suggesting that the medium picture remains positive. The only other average of note is the 100 day which gold is attempting to breach at time of writing but any failure at the $1362.92 level could prove pivotal.