Originally published March 24th, 2013.

Although silver's long-term charts are more messy and difficult of interpretation than gold's, on its long-term 7-year chart we can see that it, like gold, is getting close to a lower supporting trendline drawn parallel to the definite upper trendline drawn across the 2006, 2008 and 2011 highs, where the chances are good that it will successfully find support and turn higher, particularly as this trendline has now risen steadily to come into play underpinning the strong support level where the price has repeatedly reversed to the upside over the past 18 months. A short-term dip into this support, which looks likely for reasons we will look at shortly, will be regarded as throwing up an important buying opportunity.

The fundamental reasons for a continuance of the long-term bullmarket in silver are the same as those for gold, and they are discussed in the parallel Gold Market update, so that there is no need to repeat then here.

On its shorter-term 8-month chart we can see that after crashing a support level on heavy volume in the middle of February, the price has tracked sideways in a narrow range, with unfavorable volume indications, all of which implying that the pattern is a bear Flag. If it is it will break lower again soon, but for other reasons it should not drop all that far before it turns higher again, the chief one being that another break lower will take the silver price down into a zone of very strong support. So if it does break lower as expected it is unlikely that it will drop below $26.50 at the lowest, before it turns up.

The latest COT chart for silver showed a significant drop in Commercial short positions last week, but as we can see there is still room for improvement - which would likely be occasioned by a short sharp drop towards the clear line of strong support at recent lows at about $26.50.

The latest silver Public Opinion chart shows that silver is now held in low esteem by investors, which is of course bullish. The expected short-term fall in price would result in Public Opinion dropping to arrive at recent lows, or even make new lows, which, if it happens, will be very bullish indeed.