What’s inside:
- Silver strength still likely with USD weakness
- Keep an eye on gold around 1250
- Lack of general clarity leave us on the sideline
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On Monday, we admittedly said we weren’t fully convinced precious metals would head higher based on their own technical merits, but that conviction in USD weakness was the crux of our argument for higher gold and silver prices.
Gold is nearing a level of resistance (~1250) in the form of a trend-line running down from last summer. Silver is lagging behind, though, and doesn’t have any significant top-side levels to focus on. The only notable zone is support in the vicinity of 17.10/30.
With that in mind, we will continue to follow the US dollar and gold for cues on what to do with silver. Should gold turn lower off resistance then silver should follow suit. Looking to the US Dollar Index (DXY), support doesn’t arrive for about another 1% lower under 99.
The general lack of clarity leaves us in a state of wanting to see more. With that in mind, we’ll run with other themes of higher conviction (i.e. USD short, DAX short) and wait for cleaner set-ups in gold & silver with good risk/reward to present themselves.
In terms of ‘high’ impact economic events, the calendar for the rest of the week brings us Yellen speaking tomorrow and US Durable Goods Orders on Friday. For details, see the economic calendar.
Silver: Daily
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---Written by Paul Robinson, Market Analyst
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