Industrial production rose more than expected
Silver prices slipped on Tuesday as the dollar continued to rally. Since silver is priced in U.S. currency, a stronger greenback generally weighs on silver. The dollar rallied along with U.S. Treasury yields following a stronger than expected retail sales data showing that the consumer remains active despite higher inflation. Industrial production also rose in October.
Silver prices slipped on Monday. Prices have formed a reverse head and shoulder pattern which is a bottoming breakout pattern. This is likely a pause that refreshes. Support is seen near the 10-day moving average at 24.54. Target resistance is the August highs at 26. Short-term momentum has turned negative as the fast stochastic generates a crossover sell signal. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.
Industrial production rose 1.6% in October, ahead of the 1% estimate and a rebound from the 1.3% decline in September. And capacity utilization rose to 76.4%, its highest level since December 2019. The September weakness reflected severe shortages of semiconductor chips that contributed to a fall in auto production.
David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.