It was a spectacular rally today with the price of silver finishing COMEX up 3.8% at $31.65 per ounce for a gain of $1.17. It didn’t stop there as afternoon electronic trading in New York added another $0.59 per ounce, pushing the price to $32.20.
Silver performed decisvely better than gold today. Having pushed through the 50-day moving average, technical traders have been given the green light to pile in long, or perhaps cover short positions. This was a solid break above the $30 psychological resistance level too, which served to add fuel to the fire. Both the moving average and $30 price level have now become near-term support for traders.
For the current silver price update and live silver price charts, please visit PMBull’s Current Silver Price page.
The rally in Silver has now taken us back to mid-December price levels. What can we say? These explosive moves higher always come when least expected. This is the reason you can’t really trade your core silver position. You just don’t know when it is going to take off, and then keep running. This could be the start of a move to new highs, or it could be the tail end of a major bounce, with another leg down in store for us. At least one guru out there, David Morgan, predicts $60 silver for 2012 but has suggested that the move won’t come until later in the year. With long-term money, buy and hold your physical silver and then sleep tight.
On the Silver ETFs front, Sprott’s Physical Silver Trust (PSLV) did not keep up with SLV today. SLV gained 5.0% and PSLV only 3.7% during market hours. This continues to leave the premium on PSLV at a much more reasonable 9.1% versus the over 30% premium we saw just a few short weeks ago.
ZeroHedge maintains that the original premium in PSLV was most likely due to a shortage in physical silver, which of course pushes the price of physical silver higher. Today they posted an interesting article explaining today’s silver surge that suggests it was the direct result of Sprott applying proceeds from the offering announced two days ago. In our post on the Sprott offering and PSLV premium we suggested that it should be good for silver prices. ZeroHedge does a little speculative quantification as to how much good, which may make PSLV holders feel a little better.