Silver loses steam, but bulls keep it from losing its gleam

SILVER failed to sustain the bullish momentum two weeks ago after it broke above the US$17.00 range high. The lack of bullish follow-through led to silver falling back below the US$16.00 handle once again, but the strong base of US$16.00 psychological round number stood rock-solid suggesting the bulls are still present.

After silver briefly tagged below the US$16.10 range low, relentless buying resurfaced proving the significance of the US$16.10 area. The bullish rejection makes this the fifth time silver bounced off the US$16.10 range low in the past three months suggesting the bulls stand ready to defend that level.

Looking over at the mining space, the silver miner ETF, SILJ (ETFMG Prime Junior Silver ETF) also exhibited a similar strong support in the foreground. SILJ is an exchange-traded fund that tracks a modified market-cap weighted index of small-cap silver mining and exploration companies.