The silver futures remained in a tight trading range after the significant jump from the previous sessions ahead of the Federal Reserve policy meeting. Other central banks were also scheduled to release their respective benchmark rates, which drove the dollar lower and the commodities in the green territory.
At 13:07 UTC, the white metal opened at 19.130 with an Intraday high of 19.262 and an Intraday low of 19.102. Silver found resistance at 19.282 and resistance at 19.052 before it closed at 19.198. Despite the drop at 19.173 in the morning session, the metal touched the green candle in 19.183 during the mid-session.
As you see in the image above, silver soared from 18.722 to 19.193 as the speculations for a rate hike slowly diminished. The white metal was still close to $20 mark, which makes the trend prone to the upside. Silver stays close to the upper barrier of the band, thus expect a strong trend within the day. Although there has been some red spot in the trend, a reversal is not yet feasible.
Silver Ticks Upward
The white metal usually follows the trend of gold among other precious metals. As the US central bank delays the rate increase, commodities find a green momentum. The chart below shows the uptrend of silver in August and July. Apparently, silver surpassed the $20 mark when it climbed at 20.594 in the first week of August from 20.291 in July.
For the first half of 2016, the white metal has advanced for almost 50 percent as investors tend to substitute it with the yellow metal. There were instances that most of the investors went too cautious and chose the safe haven assets. After Brexit, the global financial was tattered and uncertainties brought various market fluctuations. In the middle of the wariness, market players focused on assets such as silver.
The white metal is considered to be an industrial commodity which is traded within an industrial market. Industrial commodities take part in the general manufacture and availability of goods. The demand for silver comes from the wide array of technological devices such as computers, power generators electrical contacts and batteries.
Market participants expect the U.S. central bank to keep its interest rate between 0.25-0.50 on their policy meeting this Wednesday. The uncertainty over the decision of the Fed has weakened the dollar while the U.S. stocks opened higher. If the September rate hike won’t be pushed through, it will be in December already. A November rate hike won’t be technically profound due to the proximity to the presidential election.
Central banks typically look for economic and political stability before imposing a change of the rates. In the second half of the year, the labor market was extremely upbeat followed by other relative economic reports, however, the U.S. economic data were not sustained in the last few weeks.
Meanwhile, the oil prices stayed at the negative territory over oversupply concerns. OPEC is scheduled to hold a meeting next week in hopes of rebalancing the flooded oil market. The commodity found a breather on Monday, but the gains were found to be limited.
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