Silver and Gold Market Update

March 10, 2009

          Silver and Gold closed below the first support targets of $12.75 and $900 Tuesday. The brief rally at the end of last week was expected due to the 8 straight down days prior. However, silver and gold could not breach the $13.45 and $945 resistance to confirm a new uptrend and broke down hard today. We are now testing lower levels of support, which could drop as low as silver $12.25 and gold $885. I suspect those levels will hold since they are near the lower line of the channel that has been trending upwards since November. I will be watching the market closely to see if that holds true. If they were to drop below those levels, gold should find strong support around the 200 day moving average of $860 and silver would find very strong support around $11.50. However, closes that low could call into question whether or not a spring rally will materialize.

          I bought some silver today at spot $12.61 and will likely finish my purchases this week. It is possible that there is more downside in this correction, which is why I trade using very little leverage. I expect that gold and silver will soon start a rally that will peak within the next month or two. In the meantime, since I’m not trading on a tight margin, if silver were to drop another dollar from these levels I won’t lose any sleep. In these volatile markets, peace of mind makes more sense to me than trying to use a lot of risky leverage to maximize potential gains.

Best wishes on your investing and future and God Bless,

Timothy Silvers

 

Disclaimer: This article represents the opinions and personal views of Timothy Silvers and is not intended to be investment advice. If you choose to use this analysis for your personal trading, Timothy Silvers assumes no liability for the direct or indirect losses you may incur due to using this article to make your investment decisions. You are totally and completely responsible for your own investments. At any given time, Timothy Silvers or his friends and relatives may have positions in silver related investments that may or may not follow the recommendations contained in this article. The information in this article may not be completely correct and accurate. Even though Timothy Silvers has done his best to review the content and accuracy of this article, he is in no way liable or responsible for any mistakes or omissions.