Silver price falls following Friday’s rally

on Nov 24, 2014
Listen, Monday, November 24: The price of silver has fallen so far in today’s trading after last week’s positive close. On Friday, demand for the precious metal rose after the People’s Bank of China unexpectedly cut interest rates for the first time in over two years.
Silver for immediate delivery had fallen 0.2 percent, or about three cents, to $16.38 as of 06:48 GMT, and was trading over three percent below its 50-day simple moving average of $16.92. The precious metal gained over one percent during the previous session and touched an intraday high of $16.60, the strongest level so far this month.
Demand for precious metals rose following news that the Chinese central bank had cut its benchmark one-year deposit rate by 25 basis points to 2.75 percent and trimmed its one-year lending rate by 40 basis points to 5.6 percent. The move came as a response to recent signs of a slowdown in the world’s second biggest economy.

Spot silver also managed to chalk up a second consecutive intraweek gain for the first time since July. According to IG analyst Chris Beauchamp:
“”It seems remarkable to say it but silver has finally broken through the July downtrend””
“It seems remarkable to say it but silver has finally broken through the July downtrend, if only on the hourly chart. We need to see a close above this line for further gains in the direction of the week’s high at $16.50.”
Beauchamp added that should silver fail to hold on to its gains it would slide to around $16, followed by a possible dive to the 14 November low at $15.35.
The price of silver for December delivery was virtually unchanged, falling about half a cent to $16.36 as of 06:52 GMT on the COMEX in New York. According to a report from Scotiabank, weekly momentum indicators continued to show signs of stabilization at oversold levels, while trend indicators remained biased towards a further downside slip.
“Upside risk levels include the 9 week MA at 16.77 and the open of the weekly candle ended October 31st (17.21). Meanwhile, near term support is expected around 15.80,” the bank added.
On Friday the Commodities Futures Trading Commission (CFTC) released data which showed that hedge funds and money managers had switched their net position in futures for the precious meatal from short to long during the seven days ended 18 November. According to the CFTC, net silver longs totalled 745 contracts as of last week, compared to net shorts of 1,983 contracts in the preceding week.
Based on the most actively traded COMEX contracts, those for December delivery, with a total volume of trade in gold and silver at 26,080 contracts as of 06:52 GMT today, the gold:silver ratio was at 73.31, down 0.2 percent from last week’s 73.15 close.

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