Silver futures continue to consolidate after the roller coaster trading of the last several weeks, with the stabilization near the $40 per ounce level seen as encouraging for the gradual development of a meaningful trend. Siler has been somewhat out of step with the rest of the precious metals complex after having made its run to the 2011 high many months before gold did, and silver has yet to surpass its 1980 high of above $50.
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Monday's trading brought the market further into the middle of a large Channel Down chart pattern. Support for the channel was retested during last week's dramatic drop in both gold and silver, with the subsequent retest in silver proving to a be a shallow retracement by missing the support line.

This shows a possible rounding bottom with a potential rally back to resistance at $41.10 as the next swing for the market. A move above this level is required to trigger an upside breakout and another run at the highs. Meanwhile, range-bound movement inside the channel provides a fairly wide range for short term trading from both the long and short sides.

A drop below support at $40.00 per ounce would do some technical damage to the chart and encourage a larger downside move, with possibly longer term bearish implications.
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