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Silver Briefly breaks Above $23 before Falling Back Lower


The spot silver futures contract briefly broke above its week long trading range before paring back some gains and falling back towards $23 per ounce and back within the rising ascending triangle formation. This chart formation has been in play since 3 October.  

The spot silver (XAG/USD) gained as the U.S. dollar experienced come weakness. The greenback has settled down pushing the spot contract back lower as sellers look to challenge former resistance now support lining up at $23 per ounce.

The economic data on the calendar is fairly quiet on Thursday. There are a number of U.S. Federal Reserve Board monetary policy makers are speaking today. Also giving comments today re monetary policy makers on European Central Bank as well as from the Bank of England.

As far as economic data is concerned, the United States Labor Department will release weekly initial and continuing jobless claims. The world’s largest economy will also publish weekly crude oil inventory numbers.

The U.S. will also publish their monthly core and headline producer price index (PPI). Also called factory gate prices. The United Kingdom will releasing housing price data.

Daily Spot Silver Futures Contract Analysis

Looking at the above four hour MT 4 price action chart, if the spot XAG/USD contract sees a daily close below $23, this will then open the door for $22.80 per ounce. The white metal, however is still above the 21 and 50 day simple moving averages and the relative strength index (RSI) still looks positive above the mid-line.

A daily close below $22.80 opens the door for $22.35 before $22.14 per ounce comes into focus. The next downside level lines up at $21.92 per ounce.

A close back above $23 could bring the 200 day simple moving average lining up at $23.15 per ounce into focus. The next upside barrier would then line up at $23.20 per ounce before $23.80 per ounce then coming into play.  

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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