Silver has been in a major uptrend registering new highs from past 6 weeks after hitting a low of $15.675. Since then it has gained $1.804 incrementally over the weeks showing more solidarity over gold which is more volatile. Both the precious metals have been on a tear over safe haven buying broadly due to worries over U.S policies, global uncertainties and a weakening dollar, though gold had posted a negative weekly return in the same period where as silver was in a clear uptrend mounting week on week gains.
Demand for silver is also higher than gold because of its industrial usage.
On weekly charts-
Technically silver is in a bullish momentum with prices expected to test new highs due to fundamentals supporting the buying side.
A triangle is formed on the chart where the price might face a resistance at $18.070 (A) on the upside suggested by intersecting bullish/bearish ray-lines. Whereas metal should find short-medium term support at $17.200 (B). The metal has a big support at $16.100 (C) which may be tested if situations take a turn for the worse.
Overall the metal is trading with a positive bias and is expected to make new highs.
Gold prices today gained in Asian trading hours rebounding from recent lows which was a result of Hawkish commentary by the Fed more than the rate hike. A persistent stronger U.S dollar index is still capping the positive movement in the yellow metal.
Gold is trading a 0.48% or $5.45 higher with silver following up with a 1.28% or $0.205 gain.
Gold prices had fallen overnight to settle at 10 month lows on account of risk on trades in developed markets across the globe.
Demand for the yellow metal has fallen in India due to liquidity crisis caused by demonetization drive who is one of the largest importer of physical gold.
Weekly Gold chart suggests a support at $1131.5
Weekly Silver chart suggests a support at $15.850
Just hours before the critical decision of Federal Reserve of America for a highly anticipated rate hike which duly has been factored in by the capital markets across the globe, precious metals are trading in positive territory with gold up 0.4% or $4.6 at $1163.60 and silver up 0.59% or $0.101 at $17.078 where as dollar index is trading slightly in negative zone with a 0.16 0r 0.16% cut at 100.92 during the Asian hours of trading.
How are the technicals of both metals shaping up ? i have already covered gold in this post – Gold ready to glitter back again
Technically daily Silver chart is showing a median point of $16.836 which is derived out of the merger of 2 trend lines criss-crossing at that point.
Bullish trend line suggests a price movement towards the $18 level while on the other hand bearish trend line suggests a move slightly lower than $16 making the $16.836 level more or less placed at 50% between the 2 decisive points.
This price point can likely act as a good support in short term, a decisive violation may result in sub $16 pricing for this shiny metal.
A rebound rally is expected to be in store for silver as most of the negativity arisen due the Fed rate hike is already in the price but a knee jerk reaction towards the level of $16.836 may not be ruled out either when the policy is announced later in the day.