Looks good and sounds good Silver spiked to a high of $8.13 this week as petro-patch profits rolled into precious metals. It closed at $8.05, the highest weekly close since December of 2004. The high of the week was $8.13. Fund traders love to trade the breakout, so when the market made a new 2005 high, volume spiked along with the price. Traders will now be watching to see if producer selling above $8.00 caps the rally. If it does, heavy long liquidation in front of first notice in the NYMEX December contract may materialize.
Silver has certainly jumped back into the limelight, and now may need only to build a solid base above $8.00 to launch a move into double-digit territory. While technical studies have moved into overbought territory, there still appears room for higher prices in the short term if the multi-year highs from 2004 can be breached. Resistance is expected at this week�s high of $8.13 and support at $8.00.