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Silver price recovers slightly following yesterday’s steep selloff

Share this article!, Tuesday, December 23: The price of silver has risen so far in today’s trading session, recovering slightly from yesterday’s sharp declines. The precious metal fell under pressure during the previous session as the price of oil took a fresh dip.

Silver for immediate delivery had risen 0.5 percent, or nearly eight cents, to $15.69 as of 06:29 GMT, and was trading over four percent below its 50-day simple moving average of $16.38. Yesterday, it ended the session 2.67 percent down, having touched a three week low of $15.51 in earlier trading.
According to analysts, the decline in precious metals such as gold and silver is related to the continuing slump in oil. Crude prices have plunged to five-year lows and have fallen over 40 percent since their 2014 peaks in June, boosting concerns that inflation will stay low and limit demand for silver as a hedge.

According to Jason Cerisola, a metals dealer at MKS Group: “Skyrocketing equity markets, a firm dollar and weakening oil prices” have finally caught up with precious metals. In his view, the decline has triggered long liquidation and position squaring ahead of the Christmas and New Year break.
Gary Wagner, editor of The Gold Forecast, wrote in a note from yesterday: “[A]s oil continues its spectacular decline, and prices for gasoline start eyeing $1.50 per gallon in some places, inflation seems” to be fading. According to him: “Aside from the powerful effect on gold and silver, the result of the diving prices will allow the United States and parts of Europe to continue their manufacturing renaissance.”

The price of silver for March delivery had risen four cents cents, or 0.25 percent, to $15.71 as of 06:39 GMT. Scotiabank wrote in a report from yesterday that momentum indicators remain bearish, “and are reinforced by the short term MA’s and the bearish ADX at 28. Further weakness would shift the focus to the November closing low of 15.33”.
Based on the two most actively traded COMEX contracts, with a total volume of trade in gold and silver of 23,227 contracts as of 06:39 GMT today, the gold:silver ratio was at 75.08. According to Scotiabank, the ratio has climbed above 75 for the first time in four session. “We note the emergence of support at 74, and also note that candles hint to a picture that is suggestive of limited upside given the attempt and failure to sustain a full retracement of Friday’s decline,” the bank added.
As of 07:44 GMT, Tuesday, 23 December, Silver share price is $15.76.

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