Continuous Commodity Index Rises – So does Silver

Silver continues it pattern of mirroring the movements of the Continuous Commodity Index ( CCI ). Today was one of those “Let’s buy Commodities” Day by the hedge funds, especially in the Crude Oil and Metals markets (Palladium, Platinum, Copper). With the Dollar lower, it was the return of the “RISK ON” trade and thus recent short sellers in silver were pushed out as some fresh buying was taking place.

From a technical chart perspective, silver managed to return above broken support at the $31 level. Where it goes from here is anyone’s guess. If the “Buy commodities” theme continues, silver will rise. If money flows reverse or slow into the sector, then sillver will move lower again. It really is that simple.

Volume of trades below the $31 level dried up and seemed to pick up a bit today when silver pushed above $31.25. From what I can see on this chart, if silver prices drop back below $31.10, it will probably move lower and retest yesterday’s low. If it can push past $31.80 on the topside, it should revisit $32.25.

We will just have to watch.

Take a look at the following chart of the CCI and again compare it to the Silver chart. See how closely the two track each other. It is quite remarkable.