Silver Prices: Traders Book Profits On Long Positions
Silver prices have given up a bit more than 4% from last week’s high of $15.97 as the increased risk-appetite lowers the demand for safe haven assets like silver. On the flip side, the S&P 500 has risen by 4.8% from its multi-month low set last week.
A return of a soft stock market is needed for a continued rally in silver prices, as the latest rise in silver prices is due to safe haven demands and a weaker dollar (which is a symptom of soft economics in the U.S. and worldwide, delaying the normalisation of short-term interest rates in the U.S.).
From a technical point of view, a break to $15.46 is needed for the bullish trend to resume. In this scenario the price of silver may reach the high of $15.79. While on a break to the February 10 low of $15.11, I would expect silver to slide to the next low and support level, which is the February 5 low of $14.67, though even higher stock markets or a stronger Dollar would be needed for this to occur.
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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