Silver has been making consecutive lower highs and is in clear downtrend since it hit its all time high of $50 in April 2011.
It lately broke below the November low support at $30.65 and just hangs over the crucial $30 mark. I assume that many buy and stop loss orders cluster at this level.
In 2012 silver consolidated in a huge trading range from $26 to $36. Compared to other risky markets, 2012 was a year of underperformance for the metal.
From a long term fundamental perspective I believe that silver is a “long” due to inflation pressures arising from central banks’ money printing.
At the same time, silver as an industrial metal is vulnerable to weak global growth that means less demand and lower prices.
To sum up, we are not yet at an ideal point of building up a long position and traders should respect and follow the current downtrend. All technical indicators hint to a short or neutral silver position.