Silver has experienced a terrific run up from $11.50 to $14.00 so a pull back of some sort was to be expected. As we write silver is at $13.15, which is pretty close to its 200dma unlike gold, which is trading much higher.

Taking a quick look at the chart we can see that the technical indicators are turning negative which suggest that silver will continue to retreat. However as silver is more or less sitting on its 200dma the downside could well be limited. The danger is that silvers big brother gold continues to be sold off and the selling spills over into the silver sector. Again this would present us with another buying opportunity if that were to happen. Having taken some profits in our gold investment account we decided to hold our position in silver.

We regarded silver as being a little ahead of itself but that it was not as overbought as gold. The question remains when do we re-commence buying stocks? The answer appears to be when gold exhausts its current selling pressure, which has so far seen it drop around $20.00.

The next ten days or so should give us some clues as to when silver will get back into the saddle and head north, for the winter! So no buying for us just yet but it is vitally important to closely observe the individual performance of silver stocks and try and ascertain which stocks will outperform this market.

Have a good one.

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