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Silver losing conviction at the daily pivot point, testing S1 and bullish commitments

  • Spot silver prices remain in consolidation but have ebbed lower on a pick up in the price of the US dollar on Thursday as the market breaths. 
  • Silver is currently trading at 15.6240 and the DXY moves higher to 95.45, up from the lows of 95.03 scored in Asia overnight. 

Despite the FOMC minutes confirming the narrative and current sentiment for a pause of rate hikes, precious metals were unable to advance. Instead, both gold and silver have moved into a sideways consolidation a little below recent highs around the pivot. Bulls cannot cross the 15.90 thresholds and 2019 highs at this stage. 

Silver making fresh lows for the session 

"Indeed, the positive precious metals environment has seen CTAs begin covering their remaining silver short positions and targeting a long position for the first time since the summer, while significant platinum short covering has also been triggered. But, the buying could be very short-lived, as silver prices will need to remain above $15.77/oz today to confirm the newly established upward momentum," analysts at TD Securities explained. 

Looking ahead

Markets will now be very data dependent considering the focus on central banks where the Fed is set to pause at a time where other central banks are leaning more hawkish. However, there are still a number of geopolitical risks that are simmering away on the backburners, including Brexit and the Sino/US trade dispute which should make for volatility in equities that will likely weigh on the greenback and send flows towards safer havens. That being said, if the sentiment stays on inflation, that will be positive for equities and negative for the dollar, which should leave precious metals neutral/bullish. 

Silver levels

The precious metal is making a case for the downside on a technical basis with the daily and 4hr MACD slipping into a negative territory. The downside swing low is located at 15.52 meeting S2. However, while consolidated around the daily pivot point still at 14.73, S1 supports at this juncture. However, the broader fundamental and technical picture remains bullish while the price continues to consolidate.  S3 and the 200-D SMA below there could be a tough area to break on the downside ahead of a cluster of fractals that gather just below the psychological 15.0 handle. On the upside, a breakout will target 16 the figure which opens a run through the early 2018 lows/support channel to summer lows ahead of the 16.targetegt. 

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