Silver prices are trading relatively flat ahead of the Thanksgiving holiday. Silver is currently trading up about a nickel as of this post in what appears to be directionless trade. While many traders and investors have already started their turkey day time off, the markets will get a fair amount of data to digest today. Investors will see the latest readings on durable goods orders, weekly jobless claims, Chicago PMI, leading indicators and consumer sentiment.
Whether or not markets actually move based on any of this data today is another question. Light holiday volume may make for very slow trade but also has the potential to incite very erratic trade. Investors will continue to monitor the data stream however, for clues about the potential timing and extent of the much anticipated Fed tapering.
Crude oil prices are continuing their decline today as investors appear content to remove some of the risk premium attached to oil prices following a nuclear deal with Iran. Oil looks poised to continue to break lower, and in doing so may take away from silver’s appeal. Weaker oil tends to reduce the appeal of gold and silver as some investors buy precious metals to hedge against inflationary risks and obviously higher crude oil prices can be indicative of mounting inflationary pressures.
Silver may also be losing some steam due to the Iran deal as precious metals are often bought based on geopolitical tensions. This new sense of diplomacy with Iran may lead to more selling in silver as investors chase potentially higher returns elsewhere.
Silver prices are clearly continuing their downtrend on the daily price charts. Although prices appear to have stabilized in the $19.85 area, the chart suggests this could be a pause before another leg lower.
It should be noted however, that silver is currently being supported by the previous trading range it held from the end of June to the second week of August. This area of price congestion could potentially act as very strong support for silver prices and a sizable bounce from this area would not be shocking at all. The potential catalyst for metals to go higher still appears to be lacking, and it is quite possible that silver remains lower to sideways until such time as the equities markets come under some pressure and investors look for other places to put cash to work.