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Silver Market Analysis

The silver market has managed a fresh upside breakout this morning, as the market has continued to draft off the positive leadership of gold. However, silver is seeing some classic
physical buying interest, perhaps because of the potential shift in policy at the PBOC and certainly because of declining Euro zone debt fears. Silver prices also seemed to draft positively off the hope for US tax reform, as many see that as a better road to deficit reduction than outright aggressive austerity measures. Silver might be somewhat held back this morning by weakness in copper prices, which in turn might have been put off balance by less than stellar Euro zone economic growth dialogue from an EU Minister this morning. Like gold, the silver market will probably take some direction from US scheduled data this morning, but with expectations calling for a minor rise in US initial claims, that could result in a slight setback into the 7:30 data window. With the overnight breakout March silver prices managed to reach their highest level since mid November 2011, and that in turn might have prompted some technically related buying this morning.
Comex Silver Stocks were 129.232 million ounces down 49,410. Stocks have increased 11 of the last 20 days. The bias is up in silver to start today, but we don’t get the sense that a broad-based risk-on rally is in the cards unless the US numbers go against expectations and post better than expected results. Therefore, we wouldn’t be surprised to see March silver consolidate its recent gains. Near term support in March silver isn’t seen until the $34.49 level, and perhaps not until $34.36. Uptrend channel support in the March silver is seen at $33.42 today, and that line rises to $33.62 on Friday.

Technical Analysis

COMEX SILVER (MAR): Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market could take on a defensive posture with the daily closing price reversal down. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The near-term upside objective is at 3486.1. The next area of resistance is around 3463.2 and 3486.1, while 1st support hits today at 3403.8 and below there at 3367.2.

 

StockMarketNews Research Team 

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