Gold (NYSE:GLD) and silver (NYSE:SLV) both continued to climb higher on Wednesday, as Moody’s cut its rating on Portugal’s long-term debt by four notches to Ba2 (junk). Gold names such as Yamana Gold (NYSE:AUY) increased 2.88%, and AngloGold (NYSE:AU) closed 1.58% higher. Once again, the day belonged to silver miners (NYSE:SIL) such as Endeavour Silver (AMEX:EXK), which gained 5.89%. Great Panther (GPL) and First Majestic (NYSE:AG) also had big days, gaining 5.14% and 3.25%, respectively. Let’s take a closer look at the most recent price action in silver.
As the chart below shows, the recent price movement in silver has been to the downside. Silver has been failing to make any significant rallies. However, both silver and gold have been trading in a relatively tight range for the summer. The recent rally in silver is surely welcomed, but investors should remain cautious as it appears that silver is still within its summer trading range. Investors looking for the summer doldrums to end, should look for silver to form a base around $36, and break through $38.50.
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Disclosure: Long AGQ.