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Silver price advances ahead of Federal Reserve minutes

Silver price advances ahead of Federal Reserve minutes
April 08
07:02 2015

The price of silver has advanced so far in today’s Asian session. The precious metals complex continued to find some tailwind as speculation that US central bank officials could delay a hike in interest rates continued to grow.

Silver for immediate delivery had gained over three cents, or 0.3 percent, to $16.84 per ounce as of 07:07 BST, and was changing hands about 1.81 percent below the 50-day simple moving average of $16.54. During the previous session, the precious metal corrected lower following Monday’s 1.71 percent jump, closing at $16.80, down 15 cents for the day.

Market participants will be looking forward to minutes from the Federal Open Market Committee’s (FOMC) March 17-18 monetary policy meeting, due to be released at 18:00 BST, for further signs as to when the US central bank may start to raise interest rates. Silver has recently rallied as a result of Friday’s disappointing US non-farm payroll data for last month, which were published by the US Bureau of Labor Statistics.

The Department of Labor’s statistics division, said that last month the world’s biggest economy created the fewest number of non-farm jobs since December 2013. The lacklustre reading from the Washington-based agency gave rise to expectations that the Federal Reserve may hold back an anticipated interest rate increase, boosting silver’s safe-haven appeal.

Yesterday, Minneapolis Fed president Narayana Kocherlakota put forward a case for waiting until the second half of next year before beginning to raise interest rates, possibly followed by a gradual increase to just two percent by the end of 2017.

“In light of the outlook for unduly low employment and unduly low inflation, the [Fed] can be both late and slow in reducing the level of monetary accommodation,” Kocherlakota said in a speech in front of the Chamber of Commerce in Bismarck, North Dakota. “I do worry about the ongoing conversation about tightening monetary policy being a drag on economic performance both in terms of growth and in terms of employment outcomes.”

Meanwhile, the price of silver for May delivery, the most actively traded contract on the COMEX in New York, had appreciated by a cent, or about 0.6 percent to $16.85 an ounce as of 06:48 BST. During the previous session the contract settled at $16.82, down 29 cents from its previous close.

Scotiabank, in a report following the end of yesterday’s trading session, said that the price of silver was “softening further from recent resistance around 17.20 with a break and close below 16.92 –the 50% Fibo retracement level of the January-March decline. Support is expected around the 100 day MA at 16.59; however, we note that the 50 day MA (16.61) appears poised to break below this level, providing confirmation of a medium-term sell signal.”

Based on the two most actively traded COMEX contracts, with a total volume of trade in gold and silver of 11,142 contracts as of 06:48 BST today, the gold:silver ratio was at 71.84. The measure has expanded about 0.91 percent so far in April.

In other precious metals, at last check, platinum futures for settlement in July had gained $1.7 to $1,174.4 per troy ounce. Palladium for June delivery was trading near its opening value at $769.75 an ounce.

As of 07:38 BST, Wednesday, 08 April, Silver’s price is $16.86.

Source: Georgi Milenkov

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Georgi Milenkov

Georgi Milenkov

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