Silver price has stabilized over the last 3 days. This is partially due to the oversold conditions (a decline from £16.33 to £14.16 with no major pullback), a pullback in the U.S. Dollar and the risk-aversion triggered following the terrorist attacks in Paris.
Silver price are trading sideways between $14.16 and $14.48. A break to the upper limit of $14.48 may lead to a rally towards last Monday’s levels of $14.75. This move may also be the beginning of a bigger rally towards $15.06 as highlighted on Friday. A prelude to what may come is the stabilization and potential reversal of Gold prices as price took out last Thursday’s high of $1089. Please see second chart below.
If the markets disregard events from last Friday and traders revert back to having a stronger Dollar and softer Euro, silver may revert back to the lower end of the $14.16 and $14.48 range. In the case that we get a break to the $14.16, this may open to a decline towards the yearly low of 13.95.
U.S. Empire Manufacturing index is on tap and a Bloomberg economist poll projects an outcome of -6.35, which would be a clear improvement on last month’s reading of -11.36, and the very low levels seen in August when the index plummeted to -14.86. However, while the overall index appears to be stabilising, new orders nosedived to -18.91 from -12.91, hence the headline reading may not improve much further in the near term. I personally don’t think this will matter too much for the market, though a better than expected reading may trigger lower silver prices.
Silver Price: Trend is Bearish Below $14.48
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
Gold Prices: Does The Break Of $1089 Mark The End Of The Bearish Trend?
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
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