Friday, January 29, 2016 2:40 PM EDT
Silver prices had given up near to 50% of their gains from the rally which started on January 12 and the $13.72 level. While I anticipated a decline in yesterday’s outlook, the current drop is slightly deeper than expected. At this stage it’s hard to attribute the decline to any specific factor and with this in mind I am placing extra emphasis on the technical outlook.
The overall trend is bullish above the January 22 low of $14, and as long as this level holds I anticipate that silver will reach the December 7 high of $14.58.
Using gold prices to predict where silver should be trading, my simple fair-value model suggests that silver should be trading at $14.78, as long as gold prices remain above $1114.
Fourth Quarter GDP on Tap
Several U.S. key reports are on deck, firstly, and most importantly, a Bloomberg poll projects fourth quarter GDP to rise by 0.8% QoQ (annualized). Secondly, the forward looking indicator, Chicago PMI, is projected to rise to 45.3 from 42.9.
Core PCE, and final University of Michigan Consumer Confidence is also on tap, but less important for the market at this stage.
After the Fed struck a dovish tone in at their latest FOMC meeting, my basic assumption is for better than expected data to have a fairly limited positive impact on the Dollar and thereby to soften silver.
Silver Prices | FXCM: XAG/USD
DailyFX, the free news and research website of leading forex and CFD broker ...
more
DailyFX, the free news and research website of leading forex and CFD broker FXCM, delivers up-to-date analysis of the fundamental and technical influences driving the currency and commodity markets. With nine internationally-based analysts publishing over 30 articles and producing 5 video news updates daily, DailyFX offers in-depth coverage of price action, predictions of likely market moves, and exhaustive interpretations of salient economic and political developments. DailyFX is also home to one of the most powerful economic calendars available on the web, complete with advanced sorting capabilities, detailed descriptions of upcoming events on the economic docket, and projections of how economic report data will impact the markets. Combined with the free charts and live rate updates featured on DailyFX, the DailyFX economic calendar is an invaluable resource for traders who heavily rely on the news for their trading strategies. Additionally, DailyFX serves as a portal to one the most vibrant online discussion forums in the forex trading community. Avoiding market noise and the irrelevant personal commentary that plague many forex blogs and forums, the DailyFX Forum has established a reputation as being a place where real traders go to talk about serious trading.
Any opinions, news, research, analyses, prices, or other information contained on dailyfx.com are provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
DISCLOSURES
less
How did you like this article? Let us know so we can better customize your reading experience.
