12 Nov 2013
Silver bouncing now but appears headed for a test of October low of 20.495
FXstreet.com (Barcelona) - Silver futures got hit relatively hard early Tuesday as the price slid from 21.35 to 21.05 in the early and mid-part of the Asian session. A bounce off the lows is under way now, but that may be a pre-cursor to another leg lower.
Silver and gold likely to have the DXY as the primary influence
The precious metals complex in general is clearly inversely related to the directional movements in the US Dollar Index. Right now, while a correction is certainly possible, technicians are saying the greenback is showing good technical strength. In turn, gold and especially silver are displaying conspicuous weakness technically.
For all the talk of looming inflation over the last several years while the global QE activities have been taking place, there seems to be no evidence of that in the charts of the precious metals. Theoretically, in that type of dis-inflationary or even deflationary environment, the global central bankers could keep their collective feet on the gas pedal. The problem with that is that it sounds from recent speech excerpts from Fed officials and their global banker cousins that they are starting to believe QE is losing any effectiveness it may have had – so they have been questioning the value in continuing on with those policies. What matters, though, is not what some or even most of the FOMC thinks – but rather what Bernanke and / or Janet Yellen thinks. We will get a true taste of her views on things on Thursday.
Technical outlook for silver
Technicians say silver almost certainly will test out the October low of 20.495 and very well may make its way all the way down to the 19.11 – 19.57 price range. In the very short-term, support comes in at the session low of 21.05. Resistance comes in at the 11/6 peak of 22.075 and is followed up by the October 30th high of 23.095.
Silver and gold likely to have the DXY as the primary influence
The precious metals complex in general is clearly inversely related to the directional movements in the US Dollar Index. Right now, while a correction is certainly possible, technicians are saying the greenback is showing good technical strength. In turn, gold and especially silver are displaying conspicuous weakness technically.
For all the talk of looming inflation over the last several years while the global QE activities have been taking place, there seems to be no evidence of that in the charts of the precious metals. Theoretically, in that type of dis-inflationary or even deflationary environment, the global central bankers could keep their collective feet on the gas pedal. The problem with that is that it sounds from recent speech excerpts from Fed officials and their global banker cousins that they are starting to believe QE is losing any effectiveness it may have had – so they have been questioning the value in continuing on with those policies. What matters, though, is not what some or even most of the FOMC thinks – but rather what Bernanke and / or Janet Yellen thinks. We will get a true taste of her views on things on Thursday.
Technical outlook for silver
Technicians say silver almost certainly will test out the October low of 20.495 and very well may make its way all the way down to the 19.11 – 19.57 price range. In the very short-term, support comes in at the session low of 21.05. Resistance comes in at the 11/6 peak of 22.075 and is followed up by the October 30th high of 23.095.