Silver prices look strong…There is not a whole lot more to say. After having a nice showing in last week’s price action, silver prices picked up this week right where they left off last week. Perhaps most notably is the fact that the price of silver opened higher Sunday night and has not looked back much. In doing so, silver prices have broken out of a very established and clear trading range to the upside. Although nothing in the financial markets is ever set in stone, this breakout looks to have legs and could drive the price of silver considerably higher here in the coming weeks.
Silver is now maintaining trade above key moving averages. This is quite likely causing more shorts to start to sweat and it is likely more of them will begin to bail en masse and drive silver higher in the process. There is some substantial resistance just above the $22 mark, and it is likely the market may need to take more of a breather before being able to take that level out to the upside. Should that level get breached however, silver prices could quickly find their way to the $24 level without blinking an eye. The 200 day EMA currently comes in at the $25 level, and could also be a potential target for the silver bulls.
This morning the market got the latest reading on the producer price index. The readings came in below expectations. M/M PPI came in at a reading of 0%. Consensus estimates had called for an increase of .3%. The core reading, minus food and energy, came in at .1%. Consensus estimates were looking for an increase of .2%. The softness in the inflation data has been attributed to a drop in energy prices.
The market will now await the readings on consumer price inflation later in the week. At first glance, the softness in inflation could be considered a bearish factor for gold and silver. The other side of the coin however, could be that softness in inflationary pressures could keep the fed from tapering a bit longer. This in turn could keep the dollar soft and give silver a boost.
As of this post, silver prices are moving higher, although the data does not seem to be much of a factor either way.
Stocks are moving lower as of this post. Should the stock market begin to enter a larger scale correction, it could be bullish for silver as well as investors look for alternative places to put cash to work. Precious metals investors will continue to watch the dollar and the equities markets very closely.
This market update is provided weekly with analysis. You can always check spot value of silver by watching our on-site charts.