Commodity Daily News

Silver Falls on European Woes

The price of spot silver fell in-line with the EUR yesterday as European Central Bank President Mario Draghi signaled the ECB would not come to the rescue of the indebted European nations. Higher yielding assets such as equities and the AUD all lost ground during Draghi's speech which weighed on market sentiment. In response traders moved into the typical safe haven assets such as US Treasury bonds and the USD. However, there may be a silver lining to Draghi's comments as the reduced ECB interest rate and increased liquidity measures may make access to cheap funding sources available for investments in metals such as gold and silver.

Spot silver has been trading in a triangle consolidation pattern from the November highs and lows. The commodity has resistance at the top of the pattern at $33.15 and at the bottom of the consolidation at $31.50. Forex traders should note that the chart pattern provides a measured move for $1.75 which could come in either direction.