Silver Technical Analysis
Silver rallied early during the trading session on Tuesday as we continue to bounce around the $60 level. It’s worth noting that the Consumer Price Index numbers came out early and the US CPI numbers, the core CPI numbers, were 0.0% instead of the expected 0.2%. In other words, inflation seems to be getting a little bit better.
Other types of inflation continue to look weaker based on CPI numbers beyond just the core gauge, and that, of course, opens up the possibility of the Federal Reserve maybe not having to raise rates as quickly, and that can provide a little bit of a floor for precious metals at times. That being said, it’s just one announcement. You can’t read too much into it, and of course, the technical picture for the silver market has been pretty ugly as of late.
Technical Outlook and Geopolitical Pressures
The 50-day EMA is drifting lower, and if it were to break down below the 200-day EMA, which it sits just below it, that would kick off a technical death cross, which, longer-term traders will a lot of times read as a very negative sign.
The $57 level has recently offered a bit of support. Breaking down below there could open up a move to the downside, but recently, it looks like the market’s happy just churning in this general vicinity. We do have other headaches to worry about, not the least of which would be announcements and statements coming out of the Middle East, which, of course, have played havoc with the bond market. Silver continues to be very choppy.
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