IGI Securities Limited – Commodity News

Karachi, January 11, 2019 (PPI-OT): Silver

Technical

Silver markets have pulled back a bit during the trading session yesterday as it continue to consolidate below the $16 level. The $15.50 level underneath should continue to be support, just as the 20 day EMA will underneath. At this point, it’s obvious that silver is bullish and with the Federal Reserve acquiescing to the Wall Street pressure, it looks as if they are going to try to keep the value of the US dollar down. Looking at this chart, the massive support is closer to the $15 level, an area that would be an excellent buying opportunity if it do pull back to that level. However, it is going to, based upon the very bullish move that is recently had. If it can break above the $16 level, then it should have the next leg up, which sends this market looking for the $17 level over the longer-term. Silver had been basing for ages, so it is looking at a longer-term changing trend.

Highlights

Silver climbed 0.6 percent to $15.65. However, it was poised to snap three sessions of weekly gains

Continued financial market volatility and a weaker US dollar should continue to support silver prices

Silver’s weakness in the second half of last year was a “failed bear-market raid”

March Comex silver was down $0.085 at $15.65 an ounce

Silver disappointed many investors last year, becoming “the most hated precious metal” of 2018

Fundamentals

Silver prices are modestly down in early-afternoon U.S trading yesterday. The safe-haven metals are seeing some selling pressure as the U.S dollar and U.S stock market have pushed to higher levels on the day. However, the metal’s resilience in the face of extreme weakness could mark a long-term bottom for the precious metal as buying momentum picks up.

The precious metal silver is seeing a strong start in 2019, with prices near their highest levels in almost six months. It is a great buying opportunity for investors now. Silver prices inched up in European trade for another session as the dollar weakened against a basket of major rivals as bets of US rate hikes in 2019 diminish.

Silver prices rose over 0.1% as of to $15.74 an ounce, with an intraday high at $15.78, and a low at $15.68. Silver rose 0.6% on Wednesday, the first profit in four days as the dollar tumbled following the Fed’s minutes.

The dollar index lost 0.1% yesterday on track for a second decline, marking three-month lows at 94.62, in turn boosting dollar-denominated commodity futures such as silver.

The pressures on the dollar came as investors expect a slower pace of US rate hikes in 2019 according to the Fed’s meeting minutes. The minutes showed several policymakers favor maintaining interest rates unchanged this year, while hinging a hike solely on data.

Federal Reserve Chair Jerome Powell is scheduled to speak at the Economic Club of Washington DC later today, with investors hoping for more clues on the future of interest rates.