Silver futures - daily chart 6th December 2010

March silver futures ended on Friday with a fifth consecutive day of gains, making it a clean sweep for the week, and closing well above the $29 per ounce price level, which has surprised even me – the dedicated silver bull! The strong performance for silver mirrored that of gold, as the two metals continue to climb higher and rebuild the longer term momentum following the short term reversal last month. From a technical perspective the longer term outlook remains firmly bullish, with the metal breaking above the high of early November, and thus establishing a new platform of support for the next leg of the upwards move.

Below the current price action, all three moving averages are pointing sharply higher, and with both the 9 day and 14 day providing excellent support, silver futures look set to break the $30 per ounce level before the end of the year, and take us well beyond my own year end forecast of $26.50 per ounce. The technical picture is also supported by the fundamentals, with demand from China continuing to remain firm for the industrial metal, and with equities performing well coupled with investor demand, the longer term outlook remains positive, and we can expect to see silver continue it’s bullish run well into next year.