Silver price decline may just be corrective: Commerzbank

on Apr 2, 2014
Updated: Oct 21, 2019

**, Wednesday 2 April:**

The silver price didn’t do a lot during most of today’s Asian session, but shortly after 03:00 BST, the price began to rally ahead of the European open in a similar fashion to the last two trading days (see chart below). So far this week, the precious metal has chopped sideways within a two-percent range from $19.64 to $20.01, lacking clear direction.

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Commerzbank senior technical analyst Axel Rudolph believes that silver is trying to stabilise above its long-term uptrend line projected from late-2008, which is currently in the vicinity of $19.32. The precious metal has recently consolidated “below the 20.49/65 resistance zone (October lows and the December/January highs) but above the 18.99/82 December and January lows”, observes Rudolph. Commerzbank does not expect a retest of the December and January lows “within the next few weeks”.

“Since the decline from the 22.22 February high can be subdivided into three distinct waves it is quite possible that the recent decline is simply a corrective move lower before another attempt at reaching the 61.8 percent Fibonacci retracement at 22.73 and the October peak at 23.12 will be made,” suggests the technical analyst. ”Only a rise above the 200 day moving average at 20.91 would point to higher prices being seen again, though.”

Meanwhile, technical strategists at ScotiaMocatta emphasize that momentum indicators remain bearish, but “they are no longer suggesting an accelerated pace of decline, reflecting the recent tightness in range”.
The US economic calendar today offers the ADP Non-Farm Employment Change for March at 13:15 BST.
The market consensus is for 192,000 payrolls, which would be a robust rebound from February’s 139,000.
Right now, silver is trading at $19.886, up 0.54 percent intraday.


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