Silver Prices Meet Resistance as U.S. Dollar Stabilizes

Silver prices broke sharply to the downside, as buying pressure faded following a back-and-forth week.

Silver for September delivery plunged 27 cents, or 1.6%, to $16.36 a troy ounce at 8:25 a.m. ET. The contract fluctuated within a range of $16.37 and $16.65 through the overnight session.

The grey metal finished lower last week, but managed to return 4% through the first six months of the year. Despite several rally attempts, prices remained firmly capped below $18.50. Prices formed a double-top around that level in February and April. A third sustained rally through early June stopped short at around $17.71.

August gold contracts also fell through the early morning session. The contract declined $10.50, or 0.9%, to $1,231.80 a troy ounce. The yellow metal is currently trading at its lowest level since mid-May.

Gold and silver booked losses last week even as the U.S. dollar plunged to ten-month lows. The metals normally trade in the opposite direction of the greenback.

The U.S. dollar index (DXY) rose 0.4% to 96.03 Monday morning. The greenback rebounded sharply against the euro and pound through the overnight session. It also added to recent gains against the Japanese yen.

Activity on the futures market is expected to be thin ahead of U.S. Independence Day on Tuesday. Markets return to normal trading hours on Wednesday.

Jobs data will dominate headlines in the second half of the week. On Thursday, the ADP Research Institute will release its monthly private payrolls report for June. Twenty-four hours later, the Labor Department will issue its official nonfarm payrolls data. Hiring is expected to pick-up briskly in June after job gains slowed to just 138,000 in May.

Comex Silver Futures (September 2017)

Screenshot (162)

Sam Bourgi is a financial market analyst for economiccalendar.com. He has more than six years of progressive experience in economic and financial analysis, research consulting and sectoral analysis. As a published author in government, peer-reviewed, online and industry sources, he has developed a fundamental approach to the financial markets with a broad focus on stock indices, commodities and the technology sector. He earned his Bachelor’s Degree from the University of Windsor and Master’s degree from McMaster University.