Silver is caught in a tight squeeze between uptrend support and downtrend resistance, with November payrolls ready to shake things up. A breakout looms, but will it shine or slide?
By : David Scutt, Market Analyst
Silver hasn’t been particularly correlated with any major asset class over the past month, not even gold, suggesting this could be an environment where price signals hold more weight than other factors. Currently wedged between downtrend resistance and uptrend support, and with the November non-farm payrolls release looming, a decisive move may soon provide medium-term directional clues.
Silver has rebounded strongly since bottoming at $29.66 in late November, climbing within an uptrend to retest downtrend resistance established earlier this month. With four failures so far – Thursday’s dragonfly doji not included – the window for a bullish breakout looks to be narrowing before the uptrend itself comes under threat.
From a momentum standpoint, RSI (14) is trending higher, while MACD has crossed over from below, reinforcing the bullish bias. This supports a preference for buying dips or topside breaks in the near term.
Source: TradingView
Click the website link below to get our exclusive Guide to gold trading in Q4 2024.
cityindex.com
After a strong move to record highs in Q3, the outlook for Gold remains optimistic heading into the Q4, supported by the potential for ongoing central bank purchases.
If the price were to break and hold above the downtrend, one setup would be to buy with a tight stop beneath targeting a push towards either $32.18 or $33.10, two horizontal levels that acted as both support and resistance in the recent past.
While the 50-day moving average is located just above the downtrend at $31.71, the price has a chequered track record for respecting the level, meaning it should be monitored but not an impediment for longs.
Alternatively, if the price were to reverse lower and break uptrend support, another option would be to sell with a tight stop above the uptrend for protection. $29.66 is one potential target with the 200-day moving average and $29.10 the next after that.
While silver hasn’t shown a meaningful relationship with the US dollar or Treasury yields recently, Friday’s payrolls report is a pivotal macro event that could shift expectations for both. Given silver is priced in USD and offers no yield, it remains relevant for traders.
With markets pricing a 70% chance of a 25bps Fed rate cut later this month, even a slight uptick in unemployment from 4.1% could create a supportive backdrop for risk assets like silver. However, a hot report, featuring stronger payroll growth and a surprise drop in unemployment, could bolster the US dollar and lift interest rate expectations, adding downside pressure to silver prices.
– Written by David Scutt
Follow David on Twitter @scutty
cityindex.com
Silver is caught in a tight squeeze between uptrend support and downtrend resistance, with November payrolls ready to shake things up. A breakout looms, but will it shine or slide?
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.
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By : David Scutt, Market Analyst
- Silver trapped between key support and resistance ahead of payrolls
- Momentum signals favour bullish bias, but time is running out
- Breakout could target $32.18 or $33.10, failure risks $29.66 retest
Overview
Silver hasn’t been particularly correlated with any major asset class over the past month, not even gold, suggesting this could be an environment where price signals hold more weight than other factors. Currently wedged between downtrend resistance and uptrend support, and with the November non-farm payrolls release looming, a decisive move may soon provide medium-term directional clues.
Time ticking for bullish breakout
Silver has rebounded strongly since bottoming at $29.66 in late November, climbing within an uptrend to retest downtrend resistance established earlier this month. With four failures so far – Thursday’s dragonfly doji not included – the window for a bullish breakout looks to be narrowing before the uptrend itself comes under threat.
From a momentum standpoint, RSI (14) is trending higher, while MACD has crossed over from below, reinforcing the bullish bias. This supports a preference for buying dips or topside breaks in the near term.
Source: TradingView
Click the website link below to get our exclusive Guide to gold trading in Q4 2024.
Gold Q4 2024 Market Outlook - City Index AU
After a strong move to record highs in Q3, the outlook for Gold remains optimistic heading into the Q4, supported by the potential for ongoing central bank purchases.
If the price were to break and hold above the downtrend, one setup would be to buy with a tight stop beneath targeting a push towards either $32.18 or $33.10, two horizontal levels that acted as both support and resistance in the recent past.
While the 50-day moving average is located just above the downtrend at $31.71, the price has a chequered track record for respecting the level, meaning it should be monitored but not an impediment for longs.
Alternatively, if the price were to reverse lower and break uptrend support, another option would be to sell with a tight stop above the uptrend for protection. $29.66 is one potential target with the 200-day moving average and $29.10 the next after that.
Pondering payrolls
While silver hasn’t shown a meaningful relationship with the US dollar or Treasury yields recently, Friday’s payrolls report is a pivotal macro event that could shift expectations for both. Given silver is priced in USD and offers no yield, it remains relevant for traders.
With markets pricing a 70% chance of a 25bps Fed rate cut later this month, even a slight uptick in unemployment from 4.1% could create a supportive backdrop for risk assets like silver. However, a hot report, featuring stronger payroll growth and a surprise drop in unemployment, could bolster the US dollar and lift interest rate expectations, adding downside pressure to silver prices.
– Written by David Scutt
Follow David on Twitter @scutty
Silver: Key break nears as payrolls loom large
Silver is caught in a tight squeeze between uptrend support and downtrend resistance, with November payrolls ready to shake things up. A breakout looms, but will it shine or slide?
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.
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