Silver Prices "Ready to Break Out" as Futures Betting Jumps to Pre-Crash Level

[The Machine]

 

 

Long-term silver price chart shows "bearish trend" meeting "5-year bull support"...

 

SILVER PRICES traded in a tight range last week, hitting a high of $20.30 and a low of $19.68 before closing just a few cents higher from the previous Friday as tensions rose over Ukraine's response to pro-Russia separatists.

 

Tracking gold's short-lived spike mid-week, silver prices had risen sharply – hitting their high for the week – after Wednesday's release of notes from the Federal Reserve's mid-March meeting.

 

The minutes showed Fed members less eager to raise Dollar interest rates than chair Janet Yellen had suggested in recent comments.

 

Friday's Fixing for wholesale silver bullion bars in the London market came at a price of $20.06 per ounce, some 16¢ higher than the week before and over 4% higher from silver's low of the year.

 

New York's Comex exchange saw May silver futures, now the most actively traded monthly contract, settle at $20.091, up by 15¢ from the previous Friday.

 

"The [silver price] range has been sideways for the past three weeks," says the latest technical analysis from London market maker Scotia Mocatta, part of Canada's ScotiaBank, "with support at the low in the 19.57-19.62 area.

 

"There is a long-term bearish trend line, which is providing resistance…in the 21.21 area."

 

But silver prices are also "trading on the edge of the 5-year trend line support," says Yana Stunis at Standard Bank's London office in a note to clients.

 

"No surprise to see open interest pile in to see a break out either way...[silver prices are] about ready for a break out."

 

Open interest in Comex silver futures rose again last week, up for the fifth week running and growing by 5% to the largest level since the same week last year – just before silver prices were hit by April 2013's gold crash.

 

Its previous peaks also marked major price moves in late-2010, early 2008 and New Year 2006.

 

 

Speculative traders have been taking the bearish side of the bet, cutting their net position on silver prices rising by 45% since the 4-month high at $21.73 per ounce hit in mid-February.

 

The long-term chart which Standard Bank highlights shows a wedge formation, with silver prices recording lower highs since May 2011 but touching 3 higher lows since late 2008.

 

Silver investment holdings at the major exchange-traded trust funds meantime ended last week unchanged on Bloomberg data, just shy of 19,764 tonnes.

 

Although silver prices were virtually flat over the first 3 months of this, "Silver saw the largest inflows [amongst commodity ETFs] during the quarter," says the Wall Street Journal, citing one provider's data, "as investors looked to the metal as a leveraged play on improved sentiment towards gold."

 

The only major silver coin producer to release frequent data, the US Mint reports 2014 sales now running 2.5% below 2013 levels to end-March.

 

Legal gold and silver imports to India, a major consumer market, showed a drop of 40% in fiscal-year 2013-2014 according to the Press Trust of India, down to $33.46 billion thanks to the government's anti-gold import rules, aimed at cutting India's large current account deficit with the rest of the world.

[Rayzur]

I didn't want to lose this template, so am posting it here.... What do you think relative to what's going on with dinar?? Interesting.....

 

The rupee was linked to the British pound from 1927–1946 and then the U.S. dollar till 1975 through a fixed exchange rate. It was devalued in September 1975 and the system of fixed par rate was replaced with a basket of four major international currencies – the British pound, the U.S. dollar, the Japanese yen and the Deutsche mark.^[134] Since 2003, the rupee has been steadily appreciating against the U.S. dollar.^[135] In 2009, a rising rupee prompted the Government of India to purchase 200 tons of gold for $6.7 billion from the IMF..

[The Machine]

I'd have to look into that further Rayzur but an off the cuff comment from me would be are you sure all the gains showed by the rupee against the dollar are atributed to the rupee alone.

The big question is " is the rupee gaining a lot of value, or has it only gained some and the remainder is atributed to a weakening dollar"

Try an across the board comparison between the rupee and all major currencies for a true perspective.

I would do it but I've been stuck in an airport in London for the past 8hours ......

[Rayzur]

Hopefully you're in Heathrow.... well if it was me I'd want Heathrow over Gatwick any day.... My off the top in reply would be that yeah its probably a bit of both.... the rupee is pegged to the SDR, so makes sense it would be a bit more steadfast relative to the singular declining USD... Apart from that, I thought the mechanics were interesting... That the rupee was pegged to the USD then shifted to SDR.. and that gov'ts buy gold when they believe their currency is rising..... I see possibility of dinar scenario on same path... its one possibility for sure... 

Great time to buy some more silver huh? I've got to get out of my knee jerk numismatic mode and into strictly bullion only..... I keep forgetting I pinky sweared to do that...... Numismatic will likely hold value over bullion, though in the coming times, I'm not sure the ratio of overage would hold.. or would ultimately hold the worth of the disparate price currently garnered..... The playing field is shifting and its hard to anticipate the rules sometimes...

Thanks for your thoughts in reply...    ..

[Dinarian64]

Machknr - when is silver going back up? I have lost my shirt and want it back

[The Machine]

Machknr - when is silver going back up? I have lost my shirt and want it back

 

If I knew that I'd be an extremely wealthy man ......... the silver market is far too volatile to predict with any accuracy.