IGI Securities Limited – Commodity News

Karachi, March 28, 2019 (PPI-OT): Silver

Technical

Silver markets fell yesterday, breaking down below the $15.30 level. It had also broken below the 200 day EMA and the 50 day EMA, both of which were flat, to show signs of selling pressure. At this point, it’s very likely that it is going to continue to see the market rotate between the $15.00 level underneath and the $15.50 level above. It had recently tested the bottom of a major uptrend line and have rolled over since then. Because of that it makes sense that it would find sellers. To the upside, if it can clear the previous uptrend line, roughly at $15.60, then the market will go looking towards the $16 level above which is a major resistance barrier. This market tends to react to the greenback strength or weakness, as the commodity is priced in those very same greenbacks. If it get US dollar weakness that could lift this market above that uptrend line.

Highlights

Silver prices were down and kept unchanged at $15.44 an ounce

The US dollar index rose, its highest since March 13th compared to the opening at 96.75

Federal Reserve policy makers kept interest rates in between 2.25% and 2.50%

The U.S economy is expected to slow this year, while the central bank is supporting economic growth by risking inflation pressures

May Comex silver was last down $0.114 at $15.315 an ounce

Fundamentals

Silver prices fell for the second straight session yesterday, weighed down by investors turning away from precious metals to bond-holding as a safe haven in the face of global economic concerns.

Some mild profit-taking pressure from recent gains and a firmer U.S dollar index on this day helped to pressure the precious metals markets. Still, losses were limited today by some safe-haven buying interest amid a bit more risk aversion in the world marketplace at mid-week.

The dollar index against a number of major currencies stabilized at 96.8 points, with a high of 96.9 points and a low of 96.6 points. While silver futures May delivery fell by 0.9% to $15.298 an ounce, the metal hit a high of $15.475 and a low of $15.27.

Returning to the US, tomorrow’s the final reading of US economic growth will be released about the last quarter of previous year, with expectations for growth slowing to 2.4% from 2.6%.

With the Federal Reserve and the European Central Bank cutting their forecasts for slower growth in the United States and the eurozone this year, with the release of data boosting these forecasts, which made worries take over markets on the prospects for a slowdown in global economic growth.

U.S stock indexes are weaker. There is some elevated risk aversion in the world marketplace at mid-week, mainly due to worries about slowing global economic growth. U.S Treasury yields briefly inverted last week when the short-term 3-month note yield moved above the 10-year note yield.

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