Worst Case Already Priced Into Silver?
Today’s Spotlight Market
Silver futures are sharply lower this morning, as there is little progress in the Greek debt talks.? The precious metals markets have largely priced in the nuclear option ? Greece leaving the currency group.? The market is reacting to the possible negative growth implications as a result of Greece leaving.? Silver and other precious metals have gotten a bit of a boost recently as investors have been ditching Greek debt in favor of safer investments.? Traders have priced in potential unrest on the upside, which may suggest the? downside in metals could be where the market is vulnerable.
Fundamentals
Silver futures start off the week on a negative note due to the Chinese Lunar New Year, which will keep physical buyers away until Tuesday of next week.? The lack of these physical buys takes away this buffer from the market, making the downside a bit more risky.? German consumer confidence rose to a 13-year high, which can be seen as a positive for metal prices. The huge drop in energy prices could account for a great deal of the enthusiasm for German consumers. The markets have failed to cooperate with the data this morning, as equities and metals have started the session off on a negative note.? Overall, industrial production seems to be softening, as evidenced by weak numbers from China and the US, which could pose a problem for Silver bulls.? Due to the metal?s more industrial nature, it may need an extra push from industrial demand if it is going to keep pace with Gold.
Technical Notes? -? View Today’s Chart
Turning to the chart, we see the March Silver contract pulling back a bit after hitting multi-month highs in mid-January.? Prices failed to break through the 200-day moving average on the upside.? Prices have broken the 20 and 50-day moving averages, suggesting that a near-term high may be in place.? The RSI is now near oversold territory, which could provide some support for Silver prices in the near-term.
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