Silver price rout continues as JP Morgan cuts forecasts

The price of silver has hit a fresh four-year low so far in today’s trading, as JP Morgan reduced its forecasts for 2014 and 2015. The US non-farm employment payrolls report, due later today, poses a further threat to the precious metal.

Silver for immediate delivery had slid 0.58 percent, or nearly nine cents, to $15.30 as of 07:47 GMT, and was trading nearly 13 percent below its 50-day simple moving average of $17.56. It reached a fresh four-year low of $15.04 earlier today. Spot silver looks poised to record its fourth straight intraweek decline, it has tumbled nearly 12 percent over the period.

Today’s US Non-Farm Employment Change report, due at 13:30 GMT, from the Department of Labor, could provide more evidence of a strengthening economy, influencing the Fed and possibly reducing demand for silver and other zero-yielding assets.

Kitco News analyst Jim Wyckoff wrote:

“Traders and investors are awaiting arguably the most important US economic data point of the month: Friday’s October employment report from the Labor Department. The key non-farm payrolls number is expected to come in at up around 230,000 in October. Trading could become active if the report is a “miss” from expectations.”

The price of silver for December delivery was little changed, down four cents, or about 0.1 percent, to $15.32 as of 08:15 GMT on the COMEX in New York. The contract reached $15.04 earlier in today’s Asian session, the lowest since February 2010. According to a report by Scotiabank:

Technicals are bearish and suggestive of further downside despite being oversold as we note a continued rise in the DMI trend indicator. Near term support is expected around 15.15 with resistance expected above 15.60.

Based on the most actively traded COMEX contracts, those for December delivery, with a total volume of trade in gold and silver at 69,473 contracts as of 08:15 GMT today, the gold:silver ratio was at 74.40.

The recent increase in the ratio above 74 is the highest since March 2009. Scotiabank said: “Near term support is expected at 74.00, followed by 72.50, and we note that technical remain broadly suggestive of further upside.”