NEW YORK (TheStreet) -- Volatility in silver prices will likely continue this week on the offsetting effect of bargaining opportunities due to price declines last week and bearish technical indicators. In addition, volatility in the dollar index could result in additional volatility in silver prices.During this week, the dollar may remain firm on positive U.S. economic data in the form of rising durable goods orders and falling jobless claims. However, the second quarter GDP figures could show a slowing down in the economy, denting market sentiment and the dollar index. Overall, the dollar may result in additional volatility in silver prices. Moreover, declining PMI numbers from the eurozone may further strengthen the dollar. Data from Germany seem mixed with lower government spending, a major cause of concern, while rising personal consumption and international trade are pointers of the rigidity in the German economy. COMEX silver futures for September delivery traded volatile last week. The white metal experienced a high of $18.62 an ounce and closed at $17.99, below the psychological mark of $18. The hammer candlestick formation in the weekly COMEX silver chart implies that the downtrend will continue this week. While silver is in a short-term consolidation mode, the trend can be confirmed only after the metal breaches $17.79 an ounce level. Last week, silver failed to take cues from gold and closed down 0.65% to $17.99 an ounce on the COMEX. Silver, more sensitive to economic activities, tracked base metals during the week. However, base metals closed marginally higher by 0.16% on the LME. Equities remained lower after disappointing economic data from the U.S. exacerbated the concern of a slow economic recovery. The MSCI world index for stocks was down 0.9% for the week. The gold-silver ratio advanced to 68.21 from 67.09, as silver fell while the yellow metal strengthened. Silver for spot delivery on the COMEX closed at $18.00 per ounce, while futures ended at $17.99 per ounce, suggesting that silver prices are in backwardation. In contrast, COMEX gold for spot delivery closed at $1227.8 per ounce, while futures ended at $1227.6 per ounce, indicating that gold prices are in backwardation as well. The calendar spread, between silver Sept. 2010 and Dec. 2010 closed at -0.050, signifying that the far month contracts closed higher than the near month contracts. Meanwhile, the calendar spread between gold Oct. 2010 and Dec. 2010 contracts hovered at -1.20 past week.
All major silver producers gained last week. Coeur d'Alene Mines ( CDE), Mag Silver ( MVG), and Silver Wheaton ( SLW) led the pack with 12.9%, 10.4% and 8.9%, respectively. Meanwhile, Silver Standard Resources ( SSRI), Pan American Silver ( PAAS), Hecla Mining ( HL), Endeavour Silver ( EXK) and Compania de Minas Buenaventura ( BVN) gained around 4.85%, 2.43%, 2.27%, 0.92% and 0.03%, respectively.