The debt issue is still high on the agenda for forex traders.

You see it in their daily trading. Back and forth to the trading floor, but the situation is good for only a few real winners. One of them in the past few weeks has certainly been silver. The little brother of gold is apparently back on track. Forget about the little crash in early May, when many investors had believed the success story of the silver is coming to an end.

Quite the opposite seems to be the case as gold and silver are the popular asset class for many investors because of the debt crisis in Europe and the U.S. seems to be not yet been clarified. In addition, silver is an important component in many industrial processes, which should keep the price stable for the raw material. Due to its greater industrial use, silver benefited to a greater extent on the global economic recovery. While this applies to gold in the jewelry industry applies, silver is used in various industrial fields, especially in the electrical industry but also in medicine and solar technology, and water purification and treatment.

The current ongoing economic recovery creates a growing demand from the industry, which is responsible for half of the silver consumption. From the economic side, no signs of a slowdown can be identified, meaning the positive trend in the price of silver will continue. The greater cyclicality that also ensures that silver is subject to significantly higher price volatility than gold. Should the economic situation deteriorate, this could put pressure on the price of silver. This fact should keep investors in an investment as well as the currency risk is still much higher. Until the financial and economic crisis, the price of silver moved up in line with the equity markets. On 26 July 2006 the quoted price was at $11.07, on 26 July 2007 $12.79. A year later, 25 July 2008, the price was at $17.38, after it had reached the interim high of $21.35 in March 2008. It then came in the wake of the economic crisis which resulted in a significant slump. On 24 July 2009 the silver price was at $13.88, after which October 2008 saw a low of $ 8.40.

From there began a sustained upward movement. On 26 July 2010 the price of silver was already back at $18.14. After a lengthy consolidation in the past year the price sat in September 2010 around the $20 mark, with a high of $21.35 that year. The outbreak to its highest level in 30 years followed by a further dynamic increase to a high of over 31 dollars in early January.

After a brief correction as a result of a dynamic increase we saw a low of just over 26 dollars in mid-February. Then, the price of silver climbed without major adjustments to a new all-time high of $ 49.83 in late April. A few cents above the previous record high, the set was reached in January 1980, a massive correction in the course of the listing temporarily gave up to $ 32.30. After a good two months’ of sideways movement the listing climbed for the first time since early May to around 40-dollar mark.

This could now resume from a technical chart perspective, with long-term upward movement. It would allow the listing to start a new attack around 50-dollar mark. Risk investors might call the wave of Deutsche Bank and speculate on a further increase. The lever of this is currently at 2.91, with the stop-loss level at $ 27.35 currently.

If the silver price is below the low of last week back at around 38 dollars, this could technically take an even-time decrease. In this case, consider support to $35. It could bring the low in mid May at $ 32.30 back into focus. On falling prices, speculative investors place the stop-loss level at $52.55.

- Jeff

Jeff Young is the senior technical analyst at AppliedFX.com, please leave your feedback and comments on this article using the form below.