IGI Securities Limited – Commodity News

Karachi, June 27, 2018 (PPI-OT): Silver

Technical

Silver markets continue to be volatile, as they initially fell yesterday but have turned around the show signs of life near the $16.15 level. There should be plenty of interest in this market down near the $16 level, as it has been a historically important level. If it break down below the $16.00 level, then the market would unwind to the $15.50 level underneath which is even more supportive. At this point, silver is an excellent longer-term investment, but short-term investors out there, it should look at this is more or less a range bound trading opportunity. Silver will struggle with US dollar strength, but there is so much in the way of support underneath that it’s almost impossible to imagine the $15.50 level being broken with any type of significance. It is because of this that it seems there is some type of massive put near that area lifting the market as we have seen over the last several years.

Highlights

Silver lost 0.3 percent at $16.26 an ounce, slipping to $16.10, it’s lowest since May 1

The U.S dollar index higher, which is a bearish daily market element for the precious metal

July Comex silver was last down $0.053 at $16.275 an ounce

The Dollar Index reflects the dollar’s strength against a half-dozen rivals, was up 0.5% at 94.714 and about 2.8% higher for 2018 to date

Silver prices finished lower, with the precious metal under pressure from gains in the U.S stock market and a stronger dollar

Fundamentals

Silver prices are weaker yesterday. However, prices have moved well up from their daily lows that saw silver hit a seven-week low. Whereas silver markets up from their session lows just before midday.

Silver futures tilted lower in Asian trade while the dollar traded flat, not far from recent July 20, 2017 highs. Silver futures due on September 15 slipped 0.19% to $16.30 an ounce from the opening of $16.33, while the dollar index inched down 0.03% to 94.65 from the opening of 94.68.

Silver prices are following their raw commodity counterparts lower on worries of less world trade in raw commodities if a full blown trade war breaks out between the U.S and the other major economies of the world. Despite the threat of a major world trade war on the horizon, the marketplace is not seeing keen risk aversion, at least not enough to boost the safe-haven metals.

Higher rates and a stronger dollar are headwinds for commodities that don’t offer a yield and a strengthening buck tends to weigh on assets priced in the currency, including silver, making them more expensive for purchasers using other monetary units.

Now markets await later US data, with durable goods orders expected to have fallen 0.9% in May, sharpening a 1.6% drop in April. Investors worldwide are still jittery amid the U.S and China trade dispute that shows no signs of ebbing.

Core orders are forecasts to have slowed down to 0.5% from 0.9% in April, while the trade balance is estimated to have registered a $68.9 billion deficit in May, up from $67.3 billion in April.

US wholesale inventories are expected to have risen 0.2% in May, up from 0.1% in April, while pending homes sales are estimated to have risen 0.5% in May, compared to a 1.3% drop in April.

You May Also Like