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Silver Futures Market News 21 Sep 2010

The December silver futures contract on Globex took a breather yesterday ending the trading session as a small shooting star candle as the contract touched the $21 per ounce price point, only to pull back and close at $20.80 on the day.  This followed Friday’s small doji cross candle which had already hinted at a possible pause in the recent strong, bullish trend for silver as the contract approached the psychological $21 per ounce price handle.  In today’s silver trading session this price action has, once again, been repeated as markets await the Fed announcement later today.  From a technical perspective whilst the trend for silver futures remains bullish and unrelenting on the daily chart, broader market concerns coupled with the last three candles have put a slight brake on the positive outlook for silver, in much the same way as we saw in early September.  On this occasion the 9 day moving average provided the requisite support and this may pattern may be repeated once again over the next few days with a possible pullback to $20.50 per ounce as a result.  In the longer term expect to see the silver futures contract move back above $21 per ounce in due course to extends its gains further, with risk on appetite in equities and the pull through effect from gold both providing additional price drivers.