Silver spot advanced 1.12 per cent or $0.31 a ounce in the previous week to finish at $ 28.08/ ounce. Since the 2001 trough around $4, silver has been on long-term structural bull-run, forming rising peaks and troughs. In late 2008, silver registered a low at $8.4 and resumed its long-term uptrend.
It broke through a significant long-term resistance at $20 in September and trended northwards until it marked a life-time high at $49.5 in April 2011. However, silver reversed direction and has been in an intermediate-term downtrend since its life-time peak.
Long-term trend remains up as long as it trades above $24. Moreover, silver has key long-term support at $26 from which it has rebounded in September 2011, December 2011 and June 2012. Silver is trending upwards since this June triggered by positive divergence in daily and weekly moving average convergence divergence indicator.
The metal has an important long-term resistance at $30 which has to be breached first for an up move to $33 and then to reach $35 in the long-term. Next important resistance is pegged at $38.
On the other hand, strong slump below the key support at $26 will drag the metal lower to $24. Further fall below $24 will mitigate the uptrend and pull it down to $23 and $21.
Though intermediate- and medium-term trends are down for silver, important support at $24 is providing a cushion. An upward reversal from this support is positive from a short-term perspective. However, it is presently testing key resistance at $28. An emphatic rally above this level can take the metal upwards to $29.5 and $30 range in the ensuing weeks. Subsequent key resistances are at $31 and $33.
To alter the medium-term downtrend, silver has to decisively breakthrough resistance at $33. In that scenario, it can accelerate to $35 and $37 in the medium-term. Inability to rally beyond $29.5 and $30 range, the metal can consolidate sideways in a broad zone between $26 and $30. Plunge below $26 will reinforce bearishness and pull silver downwards to $25 and to $24. Immediate support is positioned at $27.