IGI Securities Limited – Commodity News

Karachi, February 01, 2019 (PPI-OT): Silver

Technical

Silver markets of course have gapped higher during the trading session on Thursday, pulled back towards the $16 level, and that bounced again. I think that silver markets will continue to show signs of support going forward, as the US dollar is softening a bit. Beyond that, I believe that there is a lot of geopolitical concerns out there and that of course could drive precious metals higher overall. The market will more than likely go reaching towards the $17 level longer term, but obviously it will get there in one shot. Pay attention to gold as well, because it tends to lead the way as silver will follow and precious metals tend to move in the same direction longer-term. Buying in dips and perhaps building a larger position, because now it has crossed above the 200 day EMA with the 20 day EMA and it now looks likely that the 50 day EMA will as well.

Highlights

Silver lost 0.4% to $16.00, having hit its highest since July 2018, at $16.19

Silver prices gathered new power to push higher Levels

The recent silver rally will continue with a wave of fresh buying, pushing prices higher in the first half of the year

Spot silver traded at $15.96, down 0.44% on the day, after advancing 3.1% during the last 30 days

March Comex silver was last up $0.143 at $16.07 an ounce

Fundamentals

Silver futures slid off July 9 highs for another session while still on track for the second weekly profit in a row, after marking two successive monthly gains, while the dollar index eked out gains ahead of a slew of crucial US labour and industrial data later and after the second round of US-China trade talks wrapped up.

Silver prices are holding most solid gains and pushed to a six-month high, but have backed down a bit as the U.S dollar index has pushed higher and to its daily high.

Silver futures due in March shed 0.65% to $15.96 an ounce off seven-month highs, while the dollar index added 0.10% to 95.65 away from January 11 lows.

Now markets await a basket of US data, with the unemployment rate expected the same at 3.9%, while average wages are expected with a 0.3% increase, down from 0.4%.

Markets will react to any significant announcements coming out of the meeting. US construction spending is estimated with a 0.2% increase, while the UoM consumer sentiment survey is expected with a dip to 90.7 from 98.3.

Investors were digesting the Federal Reserve’s Open Market Committee meeting. The FOMC statement contained no monetary policy changes but the FOMC members said they will now be patient on future Fed rate hikes due to muted inflationary pressures and some concerns about global economic growth.