Silver Price News: Silver Awaits Growth Cues

Silver ended last week on a decidedly wobbly note, closing below $29/toz and locking in a marginal decline in a volatile August. We suggested in our recent monthly Silver Price Forecast that the upcoming Fed rate cut would herald a wave of global rate cutting that would ultimately benefit silver through higher industrial demand. In the meantime, however, recent Citi Economic Surprise indices suggests that economic data is disappointing by the highest margin in two years. Thus, the current investment case for silver remains conflicted and silver has started the week trading around $28.5/toz.

The most recent CFTC Commitments of Traders (CoT) report published late on Friday indicates that silver speculators edged up their net long futures positions over the previous week. Although these positions are still c.15% below the 53-month high, they remain consistent with the relatively elevated silver net longs seen since late March. on 19 July and current levels constitute the lowest net long since late March. Conversely physical silver ETFs/ETCs appear to have suffered net outflows in recent days.

Looking to the silver chart, Friday’s decline saw silver pierce the 50-day Simple Moving Average at $29.18/toz, and the 50% Fibonacci retracement of the 11 July – 7 August high/low at $29.09/toz. This leaves the next notional support at the 20-day Simple Moving Average, currently at $28.6/toz. Below that lies ascending minor oblique support at $28.42/toz and ascending major oblique support at $27.09/toz.

Silver’s inability to confirm a breakout on 28 August and subsequent price action now presents the metal with four proximate levels of resistance: ascending minor oblique at $29.23/toz, descending major oblique at $29.49/toz and a confluence of major horizontal and descending minor oblique at $29.77/toz.

Significant events for silver investors early this week include China Caixin Manufacturing PMI for August on 2 September.