Silver Prices: Traders Still Aiming For New Lows

2015-11-24 15:30:00

Alejandro Zambrano, Market Analyst

Talking Points

Trend remains bearish below $14.40 despite, USD pulling back and risk-aversion increasing on the back of the downing of a Russian warplane by Turkey
Today’s data batch was mixed and there is no strong compelling reason to expect the price of silver to break its downward trend

The price of silver is higher by 0.70 percent in today’s session as the USD gives back some of its gains and as risk-aversion picks up as the markets digest the news of a Russian Jet being shot down by Turkey.

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Technical Outlook

The technical trend remains bearish below the November 20 high of $14.40, and as long as this level caps the price of silver, I am expecting a decline to $13.80 and $13.50.

In the case $14.40 fails to keep the trend bearish, it would be fair to expect a short squeeze taking price to $14.80 (a 38.2 percent decline from $16.33) and then $15.12 (a 50 percent correction). This may take several days to complete as the long-term fundamentals still favor the downside. The main driver is a stronger dollar and expectations of a rate increase in December.

Data Overview – No Strong Reason To Buy Silver

German IFO index increased by 109 vs. a Bloomberg estimate at 108.2.U.S. and GDP met consensus expectations, increasing by 2.1 percent QoQ (annualized). U.S. house prices also rose by 5.45 percent YoY vs. a Bloomberg estimate of 5.10 percent. On the soft side; U.S. Consumer confidence printed 90.4 vs. 99.5 expected, whilst Richmond Fed Mfg. Index printed -3 vs. estimated -1.

U.S. yields (at the point of this writing this article) were not suffering any major losses on the back of the data prints and would therefore suggest that there is no strong reason for silver prices to rise.