Silver price retreats following best day in nearly three years

By:
on Dec 2, 2014
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**Silver Price**
iNVEZZ.com, Tuesday, December 2: The price of silver has fallen so far in today’s trading after yesterday’s extremely volatile session, when the precious metal swayed between a five-year low and a five-week high, as some traders ended bets on lower prices.
Silver for immediate delivery lost 0.92 percent, or 15 cents, to $16.28 as of 07:13 GMT, and was trading 2.4 percent below its 50-day simple moving average (SMA) of $16.69. The precious metal rallied 6.5 percent during the previous session, its biggest daily gain since January 2012, after rebounding from a five year low of $14.42.

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According to a precious metals trader in Hong Kong, as cited by Reuters:
“The market was overtly short but then the move higher also looks overdone”. The dollar outlook continues to be strong while oil prices may fall again, both hurting precious metals, the trader added.
The price of silver for December delivery had shed seven cents, or 0.42 percent, to $16.37 as of 06:39 GMT. The more actively traded March contract stood at $16.42, down 0.42 percent intraday. According to a report from Scotiabank, silver’s failure to close above the 50-day SMA and the intraday plunge to a fresh low suggest the need for near term caution.

“Near term gains are expected to remain challenged above 16.80, and we look to 16.20 as a level for potential near term support,” the bank said.
The main event this week will likely be the release of the US jobs report for November, due on Friday, with its impact on the dollar influencing the price of precious metals. IG reports that unemployment is expected to remain unchanged at 5.8 percent while the number of jobs created is forecast to have risen to 222,000 from 209,000 in the preceding month.

UBS analyst Edel Tully said in a note: “Further out, price action is expected to be choppy, with liquidity conditions becoming more challenging as we get closer to year-end. We expect investors to become increasingly protective of year-to-date performance, limiting trading sizes and investment horizons heading into the yearend holiday period.”
Based on the two most actively traded COMEX contracts, with a total volume of trade in gold and silver at 37,081 contracts as of 06:41 GMT today, the gold:silver ratio was at 73.60. According to Scotiabank, the ratio failed to complete a bearish outside reversal during the previous session, highlighting the importance of 73.30 as a level of near-term support.
“We note the fresh intraday high and continue to expect further near term upside,” said the bank.

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