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Silver Price: Damage Has Been Done, Lower Prices Ahead

Silver Price: Damage Has Been Done, Lower Prices Ahead

2017-04-10 10:06:00
Paul Robinson, Currency Strategist
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What’s inside:

  • Silver price puts in big reversal day at resistance on NFPs
  • Momentum should continue lower
  • Big-picture symmetrical triangle could come into view down the road

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Friday’s March NFP headline miss (+98k vs 180k expected) sparked a big move in precious metals, especially in silver prices from an important inflection point. The sharp turn lower came from an attempt to break above a trend-line running from the November spike-high over the late-February high, as well as the high marks created from 2/27 – 3/1. The price action on Friday engulfed eight days of sideways price action, putting momentum in favor of lower prices. Silver is also back below the 200-day MA, which in the short-run may act as a ceiling as it had a floor not long ago.

Pulling back a bit and taking a look at the price swings since November, a symmetrical wedge could develop with time. It would require a move towards the December trend-line to bring this scenario further into view, and with Friday’s damaging reversal that seems like a distinct possibility. The lower-side of the wedge may align at some point with a back-side test of the July trend-line, a bridge we’ll cross should we see silver drop as anticipated.

It would require some work from here for the picture to turn more constructive, so we’ll focus on the short-side until we see something which suggests we should do otherwise.

Event risk: The calendar is fairly light this week in terms of high impact events which could move precious metals. For details please see the economic calendar.

Silver: Daily

Silver Price: Damage Has Been Done, Lower Prices Ahead

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---Written by Paul Robinson, Market Analyst

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