econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 29 September 2016

Where Silver Prices Are Headed Now After Fed's Latest Inaction

by Peter Krauth, Money Morning

Article of the Week from Money Morning

Thanks to the Fed, silver prices rallied last week and breached the $20 mark once again.

When the FOMC decided not raise rates, it accomplished a few things temporarily. Stocks rallied. Bonds rallied. Oil rallied. Silver prices rallied. And the dollar tanked, right on cue.

The S&P 500, Dow Jones Industrials, and the Nasdaq were all up dramatically on Wednesday (post-Fed) and Thursday. But on Friday, the hangover began to set in, with the major indices selling off.

The Essential Guide to Buying Gold & Silver

In our new 2016 report, you'll find...

  • The four best types of physical gold and silver to own

  • The five best silver and gold exchange-traded funds (ETFs) to invest in right now, two of which have surged a combined 69% this year

  • The four most reputable metals dealers to purchase gold and silver from


Get our Money Morning guide to gold and silver investing right here, free of charge.


The price of silver followed nearly exactly the same pattern, benefitting from dollar weakness, but then falling when the dollar regained strength Friday. Silver prices Monday were down 0.5% in morning trading to $19.68 and has fallen further to close at $19.14 today (Thursday)..

It was an exciting week, but precious metals and the markets may now be looking farther ahead to the next possible rate hike before the year is out.

Here's a look back at how silver prices moved last week, plus where I see the price of silver per ounce heading from here...

Why Silver Prices Were So Volatile Last Week

Silver prices started out strong on Monday last week. Silver opened at $19.10, likely anticipating the Fed would not raise rates. Silver prices traded mostly sideways during the day and closed $19.12.

Tuesday was another slow day. Silver prices began trading at $19.13 and exhibited little volatility, closing at $19.20.


Don't Miss: Are you doing everything you can to grow your retirement "nest egg"? You can start today with our top 5 money-making investment reports - they're absolutely free...


But the volatility came very early the next day. The U.S. Dollar Index (DXY) surged overnight and into the early morning, peaking near 96.40. But it quickly sold off and got pushed further down when official news came of the Fed's delayed rate hike. The price of silver rose to $19.40 before the open, hit $19.47 by 8:00 a.m., then $19.61 by 10:00 a.m. When the official statement from the Fed was released, silver prices popped higher to $19.72. Silver kept climbing into the close, reaching $19.81.

For its part, the DXY dropped that whole day, bottoming on Thursday around 95.07. That's a huge swing downward that lit a fire under silver prices. Silver rose in early morning trading and opened at $19.80. It then twice touched the psychological ceiling of $20, but it couldn't maintain that level. Silver closed Thursday at $19.84.

On Friday, silver backed off a little further, thanks mainly to dollar strength. Silver opened at $19.87 before falling to $19.65 by late afternoon.

Here's the DXY action of the past trading week.

silver prices

So where are silver prices headed next? Here's what I see moving silver prices for the rest of the year...

Where Silver Prices Are Headed Now

Thanks mostly to the Fed, silver prices once again have strong momentum. We can see that when we look at how the metal closed above its 50-day moving average last week.

silver prices now

Click to View

If silver doesn't take out its last high near $20, then I think we'll see it drop back below its 50-day moving average around $19.60. From there, we may retest the low of its recent range around $18.50. So far we are almost halfway there at $19.14.

The silver price action at the end of last week has shown a gold/silver ratio that's bottomed (at least temporarily) at 67. I think we could see it head back to around 69 before it reverses again. Today (Thursday) it traded above 69.4 several times and closed at 69.3.

Meanwhile, Commitment of Traders (COT) reports show smart-money hedgers hold a large short position near their recent 20-year record high. That's an ongoing contrarian sign that silver remains somewhat overbought and needs more time to work off that condition.

My sense is that the market will begin looking forward at the data the Fed may be using to decide on its next rate hike, possibly in December.

Nonetheless, conditions remain sufficiently bullish to sustain higher silver prices, pulling them up to the $22 level over the next three months.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Metals Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Precious Metals


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Problem With Obamacare Is That It Did Little To Reduce Overall Healthcare Spending
Joan Robinson’s Critique of Marginal Utility Theory
News Blog
December 2016 Livingston Survey: Forecasters Strengthen Their Predictions for Output Growth and Predict Declining Unemployment for 2017
Life Experience And Loan Delinquencies - Part 2
Homeowner Mobility Down By A Third Over Last Three Decades And State-to-State Migration At 15-Year Lows
India's Stock Market: Nothing "Random" About It
Infographic Of The Day: What You Need To Know About The Deep Web
Early Headlines: New Oil Pact, Facebook Should Crush Fake News, Trump Vs CIA, Dow 20,000?, Twin Bombings In Turkey, India Currrency SNAFU, New Charges In So. Korea, US-China Trade War? And More
Free Autographed Copies Of Frank Li's New Book Available - If You Act Fast
Most Women Inventors Come From America
Earnings And Economic Reports: Week Starting 12 December 2016
The U.S. Is Home To The Most Unicorns
Why Britain's Public Finances Will Suffer If Brexit Reduces Migration
Working From Home Is Still Rare In The United States
What We Read Today 10 December 2016
Investing Blog
The Week Ahead: Dow 20,000 Just Ahead?
Natural Gas Prices Are Headed Higher In 2017
Opinion Blog
Is Commercial Real Estate Facing A Day Of Reckoning?
The US Has A Regime-Uncertainty Problem
Precious Metals Blog
Silver Prices Rebounded Today: Where They Are Headed
Live Markets
09Dec2016 Market Close: Wall Street Closes On A New High, Trump Sugar High, Crude Prices Testing Resistance, US Dollar Melts Higher
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved