SILVER TODAY – Prices consolidate but still vulnerable

Short Term: Medium Term: Long Term: Resistances: R1 15.94 Feb 11 high R2 16.145 March high R3 16.36 October top R4 17.70 Apr high R5 18.00 May high R6 18.32 June 24 high R7 18.15 20 DMA R8 18.68 40 DMA R9 19.13 UTL Jan/Feb lows R10 20.22 Top band of recent range R11 21.60 July 2014 high Support: S1 18.68 40 DMA S2 18.15 20 DMA S3 19.13 Low end Jul-mid Aug range S4 18.89 100 DMA S5 19.13 UTL Jan/Feb lows S6 18.39 August low S7 18.00 May high S8 17.84 61.8% retracement (Jun>Jul rally) S9 17.44 YTD UTL S10 17.31 200 DMA S11 17.43 50% retracement (YTD rally) S12 16.56 61.8% retracement (YTD rally) S13 13.64 Dec low Stochastics:Crossed higher in low ground Legend: DMA = Daily moving average RL = resistance line UTL = uptrend line H&S = head-and-shoulder pattern Fibo = Fibonacci replacement line Technical Comment Analysis Silver prices have edged slightly higher in recent days, having found support from the medium-term UTL at $17.44 per oz. Additional support is seen at $17.31 from the 200 DMA. The stochastics are showing signs of fatigue, though – the fast line has turned lower. But prices have run into resistance ahead of $18, a level of previously stubborn resistance in the May/June rallies. A failure to hold above $17.44 – the 50% Fibo of the year-to-date rally – would signal a test of the 61.8% Fibo at $16.56. Other factors South32 recorded silver production of 4.694 million ounces in the July-September period from the Cannington silver mine – the world’s largest – down 7% on the previous quarter. South32 has production guidance of 19.05 million oz for its 2017 financial year, down from 21.39 million oz in financial 2016 while ore grades and recoveries decline. A poll conducted by CNN immediately following yesterday’s third and final presidential debate found that 52% of voters believe Hillary Clinton won the contest compared with 39% of participants who believe Republican candidate Donald Trump won. US voters head to the polling booths on November 8 in what has become an increasingly bitter and personal election campaign.   Net length among Comex speculators contracted sharply in the week to October 11. It now stands at 62,893 contracts, down 12,910 contracts or 17% from the previous week. The decline was led by long liquidation of 13,237 contracts while speculators covered a small 327 contracts of open shorts. Still, it feels too early to assert that a reversal of speculative sentiment has emerged, especially since the fall in the NLFP was more the result of long liquidation than of short accumulation. Investment demand has proved solid into the correction: ETF holdings stand at 668.4 million oz, just shy of their record 669.9 million oz (basis the funds we monitor) – dip-buying has been seen recently. Retail investment demand has improved. American eagle coin sales have accelerated and are running at a pace of 4.4 million oz in October compared with a rolling three-month average of just 1.4 million oz. Silver coin/bar sales by the Perth Mint in the first nine months of the year were up 28% on January-September 2015. Silver supply is also likely to be tightening – production cuts and closures at zinc and lead mines will also have hit by-product output of silver. The latest INEGI figures show mine production in Mexico increased 9.6% year-on-year in June but it was still down 4.8% overall in the first seven months. Conclusion While silver appears comfortable consolidating at current levels, prices continue to run into resistance. Silver’s ability to hold above the key UTL ($17.44) and the 200 DMA ( $17.31) will be pivotal to short-term price sentiment, with a breach of these levels likely to trigger a deerp correction – $16.56 per oz is our initial downside target, the 61.8% Fibo of the year-to-date rally. All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

The post SILVER TODAY – Prices consolidate but still vulnerable appeared first on The Bullion Desk.

from The Bullion Desk http://ift.tt/2eo5Ybk
via IFTTT