Silver Prices: Traders Do Their Best To Break The Downward Trend
- Silver traders try to challenge the downward trend, but prices remain capped at $14.40
- Chinese aluminum and nickel producers ask the government to help stabilize prices
Silver traders challenged the downward trend this morning by trying to lift silver prices above Friday’s high of $14.40. The market has since then pulled back, but the short-term trend remains bullish above yesterday’s low of $14.02.
I expect aggressive traders to be short at current levels with stops above $14.40, while traders awaiting short-term momentum alignment with the overall bearish trend, will wait for a break to yesterday’s low. In the case that $14.40 is breached, we may see stop loss orders being triggered and therefore causing a rally towards the next resistance level along the line of $14.58.
The one reason to be supporting silver prices at this stage is in response to news that the Chinese Nonferrous Metals Industry Association is in the process of suggesting to the Chinese government that it buy surplus aluminum, nickel and minor metals, including both cobalt and indium. The proposal does exclude copper but nevertheless, if they decide to run with it, we may see a boost to silver prices.
Reuters news reports that it would not be unusual for the Chinese government to intervene, citing their previous copper buying spree back in 2011. This eventually lifted copper futures by 30%.
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Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.