Silver Price News: Silver Shrugs Off Resistance

Silver enjoyed a positive end to the week, gaining over 5% and closing above $29/oz for the first time this month. However, it remains over 10% below its multi-year high on 20 May against uncertain growth prospects. Today’s open sees it slightly softer, just below $29/oz.

Silver’s recent performance was helped by news that China’s industrial production slowed by less than expected in July, though data also suggested that US industrial production in July was unexpectedly weak. Looking forward to the early part of this week, Japan Machinery Order data today and Tuesday’s China key rate setting period might also be of interest to silver investors.

The most recent CFTC Commitments of Traders (CoT) report published late on Friday indicates that silver speculators continued to cut net long futures positions. These are now c. 26% below the 53-month high recorded on 19 July and current levels constitute the lowest net long since late March. However, physical silver ETFs/ETCs show little net inflow or outflows in recent days.

Technical analysis suggests that silver has overcome key resistance levels in recent trading, despite a challenging setup. Major oblique descending support at $27.88/oz and a flattening 20-day Simple Moving Average at $28.10/oz were decisively overcome on 15 August. On 16 August silver further advanced beyond major horizontal resistance at $28.59. These now present as major descending oblique support at $27.84/oz, a 20-day Simple Moving Average at $28.08/oz and major horizontal support at $28.59/oz. Momentum has now turned positive on both the RSI and MACD.

Silver is currently trading close to the 50% Fibonacci retracement of the 11 July – 7 August high/low at $29.10/oz and a flat 50-dat Simple Moving Average at $29.19/oz. Further major horizontal resistance remains at both $29.77/oz and $32.06/oz and descending major oblique resistance at $31.26.