Morning Silver Market Report Silver remained subdued and stayed within its tightest daily trading range since late January yesterday, but it still managed to claw out a small gain for Wednesdays trading session. However, the silver bulls had to come away from Wednesdays trading action with only a minimally positive tilt, as chart action this morning is negative and weakness in gold is weighing on silver sentiment. However, silver outperformed the gold market on the rally yesterday and silver is out performing gold again this morning. Therefore silver might be developing a dual capacity to benefit partially from both safe haven/macroeconomic uncertainty and or from periodic strength in the face of a risk on environment, as that might result in improved physical demand. In other words, silver is showing a unique capacity to benefit from flight to quality but it is also paying attention to the prospect of improved physical demand. Like gold, silver has been able to respect what appears to be building consolidation support around this weeks low of $21.025, but the fact that silver is paying some attention to classic physical commodity market fundamentals and the ebb and flow of the global economy, might not be a positive for the market into the coming two days of potentially slack US scheduled data flows. In short, the failure to hold support in the face of slack data this morning could leave silver prices vulnerable, especially if todays data fails to notably lift gold prices. The silver markets short-term technical indicators suggest that the trend is negative. Comex Silver Stocks were 182.483 million ounces down 279,688 ounces. We think silver remains vulnerable to declines ahead. In fact, the failure to hold $21.02-$21.04 in May Silver later this morning could leave the silver market without close-in support. In other words, failing to hold $21.02 would put May Silver back into the wide trading range down pattern that was forged on February 14th, which in turn could mean a slide all the way back down to the top of the December through February consolidation zone of $20.63. In short, silver has to have very positive leadership from gold in the wake of slack data early today, or the bottom might come out of silver prices temporarily.
Posted on: Thu, 06 Mar 2014 13:57:02 +0000
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