Silver Prices Undermined As Industrial Commodities Retreat

Choppy trading persisted on Tuesday with silver undermined by a retreat in industrial commodity prices. The dollar also resisted more than limited losses, which curbed potential recoveries in prices.

Silver was unable to make any impression late in Monday’s US session and edged lower to the $16.65 per ounce area even though the dollar edged lower. There was little change during the Asian session as equity markets were also confined to narrow ranges.

The latest COT positioning data recorded a fresh decline in long non-commercial silver positions to just over 60,000 contracts from just above 62,500 the previous week. Although there has been no major change in positioning over the past six weeks, there is still the potential for a net reduction in long contracts, which will make it difficult for prices to regain ground.

Silver prices were undermined by a generally weaker tone in commodity prices early in the European session with a sharp retreat to test support in the $16.50 area.

There was an upward revision to the US third-quarter GDP data to 3.2% from the provisional reading of 2.9% with a stronger component for consumer spending, while investment estimates were revised down slightly.

The consumer confidence reading was sharply higher than expected with a figure of 107.1 for November from a revised 100.8 previously.

The data tended to undermine silver with a fresh slide in crude also triggering some selling pressure on precious metals with silver testing support below $16.50.

The dollar moved higher against the yen following the GDP data, but was unable to make any further impression on the Euro and was unable to make progress following the consumer confidence data.

After finding support just below $16.50, prices rallied back to $16.65 at the European close with gold also showing some resilience, while the dollar pulled off its best levels.

Dollar trends will continue to have an important impact in the short term and there are likely to be very choppy trading conditions on Wednesday, especially with the impact of month-end positioning amplified by high volatility surrounding oil prices.

Silver Prices 4H Chart

silver29-11-16

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Tim Clayton

Tim is a contributing author to EconomicCalendar.com. He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.

Indices

NamePrice($)CommentChange($)Change %
S&P 5002,215+2.29+0.10%
NASDAQ5,331-2.24-0.04%
NYSE10,995+24.68+0.23%
FTSE 1006,891.24+111.40+1.64%
DAX10,977.18+201.86+1.87%
CAC 404,685.78+53.84+1.16%
EURONEXT 100897.86+6.70+0.75%
Nikkei 22518,496.69+136.15+0.74%
HANG SENG INDEX22,800.92+125.77+0.55%

Commodities

NamePrice($)Change($)Change %Comment
Light Sweet Crude Oil Futures,D47.48-0.01-0.02%
Gold Dec 161,176.10+8.50+0.73%
Silver Dec 1617.10+0.36+2.15%
Copper Dec 162.62-0.05-1.82%