Wednesday, 24 Nov 2010

Silver Breaking Through Resistance Despite Fundamentals

Silver has been outpacing other precious metals recently, closing at $27.32 an ounce last Friday. This trend continued at the opening of this week's trading, with Silver closing above $27.80 on Monday. Today, we've seen the price descend back to a recent low of $27.18, even though fundamentals have been driving Gold prices higher.

A strengthening US dollar may have been one factor pushing against this recent wave of bullishness being seen among precious metals. EUR weakness could also be adding to the USD's latest gains.

Silver traders should be keeping their eyes on news coming from Europe. Any flight from the region's assets will likely end up in the US dollar, putting downward pressure on precious metals, oil, and other commodities. Moreover, any increase in interest rates in China could also suppress demand for precious metals.

As we head into the holiday shopping season, precious metals like Gold and Silver should find added support. Claims for $30 Silver have been posited, and expectations for an impending cyclical downturn in both Gold and Silver has been documented by me previously; but taking place, most likely, after 1 January 2011.