Today, silver prices are lower by 0.93% and nearing the lower end of their December range. The December low is at $13.59 and a break to this level would not surprise me. In this scenario, I anticipate a decline to the July 29 2009 low at $13.17. The next level beyond $13.17 is the July 13 2009 low at $12.46.
There is no more macro data on tap until tomorrow’s U.S. Jobless Claims. Markets expect an outcome of 270k (Bloomberg economist survey) and a lower than anticipated outcome may trigger a decline in silver prices. Chicago PMI for December and ISM Milwaukee is also on deck.
In the next few weeks I anticipate a break to the December low at $13.59 as I see the USD strengthening on Fed hikes. Currently overnight-index-swaps are pricing in 57 bps hikes vs. the Fed’s projection of a 100 bps increase by the end of 2016. If the Fed is correct in their forecast the Dollar stands to gain, while silver prices should decline.
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Silver Price / XAGUSD
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
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