US Silver futures rose to a high of $23.44 per ounce before settling at $23.22 - on daily charts, Silver has attained an RSI (Relative Strength Index) of 78 suggesting bullish and in oversold territory, according to Sreekumar Raghavan, Chief Strategist at Commodity Online Group.
LONDON: Silver has now entered a bull market as prices rallied 27% in the past couple of weeks above the June lows and gold benefited from the strong rally in silver.
US Silver futures rose to a high of $23.44 per ounce before settling at $23.22 - on daily charts, Silver has attained an RSI (Relative Strength Index) of 78 suggesting bullish and in oversold territory, according to Sreekumar Raghavan, Chief Strategist at Commodity Online Group. "MACD is positive and present rally in silver could easily push prices to $25 levels where it could face major resistance," Sreekumar Raghavan said.
Meanwhile, in a weekly review, Ole S Hansen, Head of Commodity Strategy at Saxo Bank said that silver was the star performer last week extending the previous week's rally due to momentum and technical buying from CTAs and hedge funds.
"The result being an impressive 27 percent rally from the June lows with almost 20 percent having been added over the past couple of weeks alone. This means it is now in a bull market which occurs when a price rallies more than 20 percent from its previous low. Improved sentiment in industrial metals, led by strong aluminium and zinc rallies - on the back of rising Chinese imports - provided the main driver for silver's increase."
Commodities in general gained last week as bond yields increased, a weaker dollar and weak equities provided the much needed support for metals complex.
Ole S Hansen writes: Gold has continued to benefit from the strong rally in silver, so much so that a host of gold negative news has failed to make an impact with the rally taking it through resistance at 1350 dollars per ounce to 1373, the highest level in almost two months. Flows in Exchange
Jeffrey Lewis of Silver-Coin-Investor sounded a note of caution noting that present rally is not indicative of bullishness in the white metal as yet but may be at the beginning stage: "In the short-term, silver’s painted price tape is not yet indicative of a breakaway price rally. Nevertheless, the price of silver has already recently broken above its 50 day moving average and now is treading water just under the level of its 100 day MA, so bullish price signals are finally starting to arise."
Traded Products are on track for the first weekly increase since February. This happened during a week where official filings on holdings in the SPDR GLD ETF for Q2 showed how institutional investors were aggressive sellers throughout the quarter. Looking ahead, gold may have some additional upside from here reaching 1415 and potentially even as high as 1450 over the coming months based on the assumption that early Fed tapering is now discounted with any change in this expectation signalling support. But first of all we need to see support around 1350 being confirmed, followed by a break above 1370,6, which is the 61.8 percent retracement level of the May to June sell-off, Ole S Hansen added.
courtesy of Bullionstreet
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