Morning Silver Market Report Silver continues to find some indirect support from strength in copper and palladium. However, the lack of a tight correlation between gold and silver prices this week suggests a lack of consensus in opinion within the precious metals complex. Silver was probably knocked a little off-balance on Wednesday by news that a major North American silver mining company was well on their way to reaching their annual silver production targeting. Like gold, silver needs to see an ongoing pattern of inflows to silver derivative holdings and that wasnt seen last night, as holdings of silver derivative instruments were unchanged last night. Silver might also need to see consistent recovery action in copper and US equities to effectively throw off the bearish tilt that has settled into the market for the first half of April. In our opinion, silver remains the most industrial commodity in the metals complex, and therefore the bull camp desperately needs to see more signs of old-fashioned growth ahead to definitively reject the $19.00 to $19.50 consolidation low price zone. Silver continues to see supportive fringe press coverage of improving Indian silver demand, but to see the March and April down trend pattern reversed in silver, probably requires consistent evidence of forward progress in the US recovery and a return to all-time highs in equities. Unfortunately the headline economic release from the US today (initial claims) is expected to show a slight rebuilding. Comex Silver Stocks were 177.596 million ounces down 170,873 ounces. Silver stocks have declined 15 of the last 20 days. We think that the aggressive downside action has run its course in silver but the path of least resistance in silver looks to remain down in the near term. In fact, unless macroeconomic skies brighten significantly, the bull camp might find it difficult to lift silver prices through significant overhead resistance at $19.86. In short, it could take a definitive risk on vibe to send silver up through the clutter of price action around the $20.00 level. Aggressive traders might consider getting long July Silver on a dip down to $19.25, risking those positions to $18.89.
Posted on: Thu, 17 Apr 2014 12:52:25 +0000
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