IGI Securities Limited – Commodity News

Karachi, June 25, 2018 (PPI-OT): Silver

Technical

Silver markets initially pulled back during the week, but found enough support, especially during the Friday session, to turn things around of form a nice-looking hammer. The hammer is at the bottom of a consolidation area that marked on the chart, so it makes sense that we continue to go sideways. However, it also have a massive shooting star from the previous week, so this shows that it is still in a very tight and range bound market overall. It is because of this the market is probably going through an “accumulation phase”, as the smart money is starting to pick up silver for the longer-term investment. The market is one that is more of an investment for the longer-term trader, so this is a value proposition. It can clearly see that the $15.50 level has offered a major floor in the market, so at this point, buying silver and holding onto it in a very low leveraged environment.

Highlights

Silver expected to trade range-bound for the day, after hitting a 6-month low the session before, with the dollar retreating from an 11-month peak

The precious metal’s safe-haven appeal and helped limit further downside

The risk-off mood was evident from the ongoing slide in the US Treasury bond yields

A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies

Federal Open Market Committee raised overnight interest rates by 25 basis points for the second time this year to below 2%

Fundamentals

Silver prices fell 0.7 percent to $16.31 an ounce. Global trade war tensions, leading to a fresh wave of global risk-off trade, as depicted by weaker sentiment around equity markets.

A goodish pickup in the US Dollar demand was seen as one of the key factors exerting some fresh downward pressure on dollar-denominated commodities like silver.

US President Donald Trump threatened a 20% tax on all cars assembled in the European Union a month after his administration started looking into whether imported cars represent “threat to national security.

Earlier US data showed the preliminary reading for the services PMI down to 56.5 in June from 56.8 in May, beating forecasts of 54.9, while the manufacturing PMI slipped to 54.6 from 56.4, missing forecasts of 56.3.

Silver futures are heading for their second weekly loss in a row, hovering near two-month lows as the dollar’s recent gains weighed on the futures, especially after Federal Reserve Chair Jerome Powell remarked recently that the reasons supporting gradual interest rate hikes are still strong and viable, while asserting the need to see sustainable inflation.

The normal levels of unemployment have become blurrier as the link between inflation and unemployment disappears, while adding that US economy is performing very well with expected further improvements in the labor market.

Last week, the Federal Open Market Committee raised overnight interest rates by 25 basis points for the second time this year to below 2%. The European Central Bank will end its asset purchases by year-end as scheduled, the risk bond-buying will continue into next year was low, even with growth likely to slow and inflation stay tame.

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IGI Securities Limited – Commodity News

Karachi, June 25, 2018 (PPI-OT): Silver

Technical

Silver markets initially pulled back during the week, but found enough support, especially during the Friday session, to turn things around of form a nice-looking hammer. The hammer is at the bottom of a consolidation area that marked on the chart, so it makes sense that we continue to go sideways. However, it also have a massive shooting star from the previous week, so this shows that it is still in a very tight and range bound market overall. It is because of this the market is probably going through an “accumulation phase”, as the smart money is starting to pick up silver for the longer-term investment. The market is one that is more of an investment for the longer-term trader, so this is a value proposition. It can clearly see that the $15.50 level has offered a major floor in the market, so at this point, buying silver and holding onto it in a very low leveraged environment.

Highlights

Silver expected to trade range-bound for the day, after hitting a 6-month low the session before, with the dollar retreating from an 11-month peak

The precious metal’s safe-haven appeal and helped limit further downside

The risk-off mood was evident from the ongoing slide in the US Treasury bond yields

A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies

Federal Open Market Committee raised overnight interest rates by 25 basis points for the second time this year to below 2%

Fundamentals

Silver prices fell 0.7 percent to $16.31 an ounce. Global trade war tensions, leading to a fresh wave of global risk-off trade, as depicted by weaker sentiment around equity markets.

A goodish pickup in the US Dollar demand was seen as one of the key factors exerting some fresh downward pressure on dollar-denominated commodities like silver.

US President Donald Trump threatened a 20% tax on all cars assembled in the European Union a month after his administration started looking into whether imported cars represent “threat to national security.

Earlier US data showed the preliminary reading for the services PMI down to 56.5 in June from 56.8 in May, beating forecasts of 54.9, while the manufacturing PMI slipped to 54.6 from 56.4, missing forecasts of 56.3.

Silver futures are heading for their second weekly loss in a row, hovering near two-month lows as the dollar’s recent gains weighed on the futures, especially after Federal Reserve Chair Jerome Powell remarked recently that the reasons supporting gradual interest rate hikes are still strong and viable, while asserting the need to see sustainable inflation.

The normal levels of unemployment have become blurrier as the link between inflation and unemployment disappears, while adding that US economy is performing very well with expected further improvements in the labor market.

Last week, the Federal Open Market Committee raised overnight interest rates by 25 basis points for the second time this year to below 2%. The European Central Bank will end its asset purchases by year-end as scheduled, the risk bond-buying will continue into next year was low, even with growth likely to slow and inflation stay tame.

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