Silver: Flip Side of the Gold Coin

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"Silver bulls have their work cut out. . .to break above the December contract's technical resistance at $13.50."

Gold traders had a good day Wednesday. Silver traders wished their day could have been better.

August futures closed up $16.60, near session highs, at $939.10 in COMEX floor trading. Fresh two-week highs were scored as critical outside markets—oil, equities and the dollar—gave bulls a chance to stretch their legs after some short covering. Bargain hunters powered gold's advance to past the $940 mark, but the momentum couldn't be maintained into the close. Later, gold eased on modest profit taking in the overnight market.

Technically, gold's trying to switch gears from its month-long malaise. RSI and stochastics have turned bullish, but the MACD indicator's still pointing southward.

Now about silver. . .

Wednesday, the active December contract got a jump start with a gap-higher opening but, after closing 35.5 cents higher at $13.245, still hasn't broken out of its summer doldrums. While the technical indicators (MACD, RSI and stochastics) look similar to gold's, silver's price action's been weaker. Silver still remains under the 62% retracement level of the April-June rally, a mark surpassed by gold.

Silver bulls have their work cut out for them if they want to break above the December contract's technical resistance at $13.50.

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