iNVEZZ.com, Monday, August 18: After undergoing its largest daily tumble in 10 days on Friday, the price of silver futures logged its fifth consecutive weekly decline and longest losing streak since the six weeks ended April 19, 2013. So far today, it has been moving in a tight 12-cent range around $19.5, near its lowest level in more than two months. Market participants continue to assess the outlook for the US economy against safe-haven seeking due to the armed conflicts in Ukraine and the Middle East.
On the New York Mercantile Exchange (NYMEX), September silver futures were up less than six cents to $19.58 a troy ounce as of 07:14 BST, having earlier tested $19.47 – their lowest level since June 17. They lost 38 cents, or 1.9 percent, on Friday in what was their biggest daily loss since August 5, to close at $19.52, below their 100-day simple moving average (SMA) for a fourth consecutive session. The price’s 14-day relative-strength index (RSI) stood at 34.07. Some technical analysts interpret a drop below the level of 30 in the RSI as a bullish sign. Silver shed 2.1 percent last week, and is up one percent in the year-to-date.
The gold:silver ratio fell 0.63 percent to 66.5, after gaining 1.2 percent to close at 66.9 on Friday, its highest level since May 27. The ratio notched up its fourth consecutive weekly gain last week, its longest rally since the four weeks ended March 21. A rise in the ratio indicates gold has become more expensive relative to silver.
The ICE U.S. Dollar Index was little changed at 81.43, after closing 0.18 percent lower on Friday to 81.42. The index is well-above its 50-day, 100-day and 200-day SMAs.
Sharps Pixley summarises the first ‘fixing’ process of the new London Silver Price (LSP), which took place from 13:00 BST on Friday: “The start price was $19.93 which attracted selling only (Auction Round 1) - the price was lowered to $19.90 which lessened the selling but still no buying - (Auction Round 2) - so the price was adjusted lower again - some buying at last and selling but not within the envelope for settling the price - so lower again and the price is "fixed" (sorry, old habits die hard)... at $19.86.” There were only three participants: HSBC, Mitsui and ScotiaMocatta.
According to the latest Commitment of Traders (COT) report, in the week to August 12, swap dealers’ (SD) short position in silver fell by 2.7 percent to 52,419 futures and options contracts – their seventh-largest drop in data going back to 2006. The SD short position hit a record of 60,599 contracts in the week to July 29. The SD net position was short 20,114 contracts. The money managers’ short position grew by 27.7 percent to 18,048 contracts, while their net position was 23,506 contracts long, down 21 percent from the previous week. Large commercial traders covered close to 10 percent of their net short position, which stood at 43,726 contracts, according to the legacy report. The price of COMEX silver futures advanced 0.36 percent between August 5 and August 12 – the period covered by the COT report. It fell close to 5.2 percent to $19.9 an ounce between July 8 and August 12. The commercials covered 28 percent of their net short position during the period, while money managers reduced their net long position by 61 percent.