Silver Price Remains Trapped Within The $17.56-$16.88 Range
- Silver prices were unable to push through the May 6 high of $17.56.
- With no trend in place and price wedged within the $16.88-$17.56 range, trading could get choppy.
- U.S. Jobless Claims may decline to 270k from 274k, according to a Bloomberg poll.
Yesterday’s strong surge in the price of silver proved to be unstainable and the May 6 high of $17.56 was able to cap price. It has since then pulled back from its high and is trading close to the middle of the $17.56-$16.88 range (May 6 high and May 9 low respectively).
With price trading sideways, as it has been over the last few weeks, it is common for price to continue to consolidate and trade in even narrower trading ranges until it gets a reason to trend. Trading could therefore get choppy with no clear direction within the $16.88-$17.56 price range.
The next resistance level above the $17.56 high is the May 5 high of $17.61, followed by the May 3 high of $17.70. The next support level below the $16.88 low is the March 25 low of $16.78, followed by the psychological level of $16.50.
A potential market mover today (but probably not important enough to push silver from its $16.88-$17.56 range) is the U.S. Jobless Claims result, which according to a Bloomberg poll, may decline to 270k from 274k. A lower than expected reading may boost demand for the USD, as it could imply that the labor market is doing better than expected. This may in turn soften silver prices, while a higher than expected reading may soften the Dollar and in turn support silver prices.
We note that some traders buy silver as a hedge against stock market turmoil, yet the S&P 500 has been trading sideways since April, which may partially explain the sideways trading in silver. For more on how and where the S&P 500 may be headed, read today’s outlook by Paul Robinson.
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Silver Price | CFD: 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