Karachi, August 20, 2018 (PPI-OT): Silver
Silver markets broke down rather significantly during the week, slicing through the $15 level with these. In fact it got as low as $14.30 before bouncing a bit. The $14 level underneath is massive support, but it cannot help but notice that it has formed a bit of a descending triangle that has broken. It could go below the $14 level, and if it do that shows just how strong the US dollar would become. However, it would not do so with leverage as it can dollar cost average a retirement account with physical silver. Remember, silver was eight or nine dollars for years before spiking to $50. This can happen again, and almost certainly will over the longer-term. It suspect that the $14 level is a major barrier that will be difficult to overcome for the sellers. The next couple of weeks will be crucial.
Silver settled up 0.42% at $14.775 a troy ounce, for a weekly loss of 4.26%
Silver has also struggled as its inverse relationship to the firmer dollar has outweighed safe haven demand
A stronger dollar and higher Treasury yields make the precious metal less attractive to investors
Investors will be on the lookout for any tweaks to the Fed’s outlook on inflation, the economy and trade war fears
The dollar index was mostly flat at 96.125 after hitting its highest since June 2017 last week
Silver futures gained nearly one percent in Asian trade away from February 2016 lows for another session, as the dollar index barely inched up in a day that lacks major data releases from the US.
Silver futures due in September rose 0.88% to $14.76 an ounce away from 2-1/5 year lows, while the dollar index edged up 0.07% to 96.17 against a basket of main currencies.
Markets now await a speech by Federal Reserve Bank of Atlanta President Raphael Bostic about the economic outlook at the Johnson City Chamber of Commerce, in Tennessee later today.
The Federal Reserve will release its latest meeting’s minutes this week, while Fed Chair Jerome Powell is scheduled to deliver a speech titled “Monetary Policy in a Changing Economy” at the Federal Reserve Bank of Kansas City Economic Policy Symposium, in Jackson Hole, on Friday, as investors already priced in two more 0.25% rate hikes later this year.
The U.S dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.50% at 96.00 late Friday, the largest one day decline in almost a month.
Investors will get the chance to parse through the minutes of the Federal Reserve’s August meeting, when it left interest rates unchanged and indicated that it remains on track for additional rate hikes this year.
Investors seeking a safe place to store assets amid trade disputes and a Turkish currency crisis have preferred the dollar to silver, undermining the reputation of bullion as a safe-haven. China and the United States will hold lower-level trade talks this week to resolve an escalating tariff war that threatens to engulf all trade between the world’s two largest economies.