Morning Silver Market Report Once again July Silver followed the lead of gold by forging a fresh lower low on Tuesday. However, in contrast to gold, silver has seen a pattern of minimally higher closes recently, while gold has seen a very long string of closes at almost the same level. Therefore one might suggest that silver has found some value on the charts, but without a definitive recovery in macro-economic sentiment we dont see the bull camp in silver garnering enough traction to entrench an upward pattern on the charts. Unfortunately for the bull camp, silver derivative holdings overnight posted a rather significant decline of 252,647 ounces! However, silver is also being put off-balance by developing weakness in copper and nickel this week and we also think silver is periodically being limited by signs of renewed strength in the Dollar. While silver has been able to track positively with gold since the May spike lows, deterioration in US and global economic views appears to be weighing on silver since the May 14th high. In fact, it did seem as if silver was knocked off-balance by the recent upside breakout in Treasuries and the reversal down in US equities. While silver wont completely avoid tracking with gold on a fresh downside breakout in gold prices, seeing another decline in US Initial Jobless Claims on Thursday could increase the odds of a solid low in silver around the $19.00 level. Comex Silver Stocks Tuesday were pegged at 175.707 million ounces down 229,287 ounces. Silver stocks have declined in 11 of the last 20 days. We continue to favor the downside as macroeconomic sentiment remains suspect, there is the prospect of adverse currency market action and the charts generally favor the bear camp. While an interim low of $19.045 might provide solid support to prices, we doubt that a hard slide and return to the early May low will be avoided if negative macroeconomic sentiment from earlier this week regains momentum in the face of critical US economic news on Thursday morning. From a longer-term perspective, silver has seen volume dry up on the late April and early May slide in prices and with the COT spec long getting closer to a mostly liquidated level, we think a bottom is near in terms of pricing. In conclusion, Silver is an industrial commodity in need of better demand prospects.
Posted on: Wed, 21 May 2014 13:12:14 +0000
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