IGI Securities Limited – Commodity News

Karachi, January 10, 2018 (PPI-OT): Silver

Technical

Silver markets drifted a little bit lower yesterday as the US dollar has strengthened during the day. The market looks likely to continue to be volatile, and as we are testing a gap, we could find buyers. At this point, I still prefer the upside overall, but if we were to break down below the $16.80 level, that could change the outlook for the short term. I think that there are plenty of reasons to think that the buyers will try to drive back towards the $17.25 level, but Silver tends to be choppy under the best of circumstances, so this move is not surprising at all. I believe that the market is essentially reacting to whatever the US dollar does, as it is a way to preserve value if the dollar is dropping. Pay attention to the Forex markets in general, and if the USD is struggling, that should be reason enough for Silver to go higher. If we can break above the $17.25 level, the market should then go to the $17.50 level.

Highlights

The U.S. Dollar firmed yesterday as investors shifted their focus to economic data, job openings and U.S Treasury yields

Yesterday the U.S. Labour Department released its Job Openings and Labour Turnover Survey (JOLTS)

Job openings increased in retail trade but decreased in other services

The Treasury Department auctioned $24 billion in 3-year notes at a high yield of 2.08 percent

Rising optimism over the outlook for U.S economic growth continued to drive the stock indexes higher

Fundamentals

Silver prices ended lower in yesterday’s trading session. A rebound in the U.S dollar index early this week is providing downside price pressure on the silver markets.

Some normal profit-taking and chart consolidation are also featured after gold prices hit a 3.5-month high last week. February Comex gold was last down $5.50 an ounce at $1,314.90. March Comex silver was last down $0.094 at $17.05 an ounce.

World stock markets were mostly firmer in overnight dealings. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The U.S indexes poked to new record highs again overnight.

There continues to be little risk aversion in the world marketplace, at present, and that is a negative element for the safe-haven precious gold and silver markets.

The key outside markets yesterday see the U.S. dollar index higher on another corrective bounce from recent selling pressure. While the greenback bears still have the overall near-term technical advantage, the bulls are out of the shoot in good fashion so far this week.

Yesterday’s U.S economic datas includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the NFIB small business index, the IDB/TIPP economic optimism index, and the World Bank’s global economic prospects report.

March silver bulls have the overall near-term technical advantage. Prices are still in a four-week-old uptrend. The next upside price breakout objective is closing futures prices above solid technical resistance at the October high of $17.59 an ounce.

   

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