Quote and Outlook on Silver By Mr. Abhishek Bansal, Abans Group
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Below are Quote and Outlook on Silver By Mr. Abhishek Bansal, Founder Chairman, Abans Group.
Precious metals to get fresh direction from Fed meeting
Silver is currently trading near $27.81, following losses from the last two trading sessions. Precious metals are trading weak due to the current strength in the dollar index and bond yields. However, the market is likely to get fresh direction from two days US Federal Reserve meeting starting from today.
The U.S. central bank is not likely to take any action on interest rates or tapering of monthly asset purchases. But it will be interesting to watch the Fed's forecasts on inflation and the strength of the economic recovery.
Silver prices are under pressure due to slightly negative than expected economic data globally. Eurozone Apr industrial production rose +0.8% m/m and +39.3% y/y, against expectations of +0.4% m/m and +37.4% y/y. Also, Japan Apr industrial production was revised upward to +2.9% m/m and +15.8% y/y from the previously reported +2.5% m/m and +15.4% y/y. The +15.8% y/y gain was the largest in 9 years.
Silver and gold prices found some support from dovish comments from ECB. On Monday the ECB signaled that it is not close to tapering its asset purchases. ECB President Lagarde said, "we need to really anchor the recovery," and it is "far too early" to debate on when to end pandemic stimulus. Also, ECB Governing Council member Holzmann said, "It's too early to talk about tapering" the ECB's PEPP program, and it is justified to wait as "the pandemic is still there."
According to the CFTC Commitments of Traders report for the week ended June 8, net long for silver futures jumped by 2289 contracts to 49806 for the week. Speculative long position dropped by 1022 contracts, while shorts dropped by 3311 contracts.
Silver prices are likely to face stiff resistance near $28.51-28.87 while immediate support level is seen around 50 days EMA of $27.87 and 100 days EMA of $26.84
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