Originally published September 21st, 2008.

Although silver investors may be understandably disappointed at its rather muted rally last week compared to that in gold, we should keep in mind that silver makes its best gains towards the end of gold uptrends, not at the start of them, which is where we are now. In the last update a snapback rally was predicted for silver on account of its severely oversold condition and proximity of strong underlying support and this is what we are now seeing. Our initial objective remains the underside of the important resistance level shown on the long-term chart here at and above $16, so on a rapid run at this traders may consider taking profits, or partial profits, with the aim of buying back on a reaction. Overall, silver looks considerably weaker than gold at this point, but as mentioned above this can be expected to change rapidly as gold breaks out to new highs and continues upwards. A clear break above $16 will be an important milestone that opens up the prospect of a run at the highs, and an eventual breakout to new highs.

The arguments set out in the Gold Market update in relation to the "bailout plan" and the dollar apply equally to silver.