IGI Securities Limited – Commodity News

Karachi, January 03, 2019 (PPI-OT): Silver

Technical

Silver markets got a little bit of a boost during the trading session yesterday as there was a global “risk off” attitude to markets in general, thereby increasing the demand for precious metals for a safe haven trade. It has just broken over the 50 day EMA, which of course is a bullish sign as well. Both the 50 day EMA and the 20 day EMA are starting to turn higher, which also is a bullish sign. Over the last couple of sessions, it has broken out of major consolidation between the $14 level and the $15 level, which of course measures for a $1.00 level move, leading to the $16 level above. I might also breaking above there could send this market reaching towards the $17 level above, which has been major resistance in the past. Beyond that, it had consolidated between $14 level and $17 above. At this point, buying short-term pullbacks as the $15 level should be supported.

Highlights

Silver stayed flat at $15.45, having earlier touched its highest since July 31 at $15.61

The financial markets are not looking for any rate hikes by the Federal Reserve in 2019

Metals Focus also pointed out that the election of U.S President Donald Trump has tampered with demand as well

March Comex silver was up $0.07 at $15.61 an ounce

There was also some weaker economic data coming out of the European Union, to also unnerve investors

Fundamentals

Silver futures tilted lower in Asian trade off July 26 highs for another session, while the dollar index fell off June 2017 highs for the ninth session out of 15, ahead of US labor and services data later today.

Silver futures due in March dipped 0.19% to $15.62 an ounce, while the dollar index declined 0.19% to 96.53 off 1-1/5 year highs. November was a disappointing month for the precious metals market, with silver prices struggling not to incur more losses.

US unemployment claims are estimated with a 4 thousand increase in the week ending December 29 to 220 thousand, while continuing claims are expected with a 12K drop to 1.689 million in the week ending December 22.

The ISM manufacturing PMI is expected with a decline to 57.7 from 59.3, while ISM manufacturing prices are expected to have declined to 57.9 in December from 60.7.

A US partial government shutdown is in its second week as President Donald Trump and the Democratic Party fail to reach a compromise on funding for the border wall with Mexico. Global equities reacted negatively today to more weak economic data coming out of China, the world’s second-largest economy.

President Trump has expressed readiness to make a deal with Democrat to end the shutdown, but he asserted he won’t budge on the border issue.

Meanwhile, the volume of silver ounces transferred in November rose by 4.2% month-on-month to 220.2 million, with the value transferred up 2.6% at $3.16 billion. There were 985 transfers in November, which was 17% higher than the prior month.