This morning, silver prices breached Monday’s high of $15.47, which triggered yet another round of buying. The plunge of the DAX 30, FTSE 100, and USDJPY triggered the move higher in silver, as traders began to sell stocks for the safe haven of silver and gold.
With the breach to Monday’s high of $15.47, silver prices have reached my $16.63 target set earlier this week. Going forward I would still expect silver to remain supported given that risk-aversion should remain high until central banks step in to save the day.
Short-Term Bullish Above $15.12
The short-term trend is bullish above yesterday’s low of $15.12 and traders will most likely see a pullback to $15.47 as an opportunity to add to their bullish exposure as per the risk/reward ratio if offered the chance here. This is on the condition that price will reach the next target of $15.80 and potentially the October 13 high of $16.03.
A future support to silver prices is potentially the strong rise in gold. With gold trading at $1235, its correlation to silver suggests that the latter should be trading at $16.49, a level which is higher than the October 2015 major high of $16.21.
For the trend to turn bearish, and bullish traders to close out their bullish positions, a break to yesterdays’ low of $15.12 is needed.
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Silver Prices | FXCM: XAG/USD
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
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