February 24th Mid-Week Market Update | Silver.com
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February 24th Mid-Week Market Update
Article By: Chelsea Mies on February 24th, 2016

Silver prices are moving higher this morning as some of the buying in gold likely spills over into the white metal. There is elevated risk aversion in the marketplace this morning as stocks opened sharply lower while crude oil also began the trading day on its heels. The dollar index is slightly lower thus far in early trade.

Price action in markets today seems to be following the recent trend of being dictated by the crude oil market. Crude saw some selling hit the market yesterday and started today seeing some follow through to that selling. As the morning has progressed, however, oil has turned the tide and is now in slightly positive territory. As such, stocks have also risen from their lows and the SP500 has reclaimed the 1900 level.

While speculation on a crude oil production cut had been swirling around recently, Saudi Arabia’s oil minister said yesterday that the country is not looking at cutting current production levels. While oil has rallied in recent trade and climbed back above the $30 per barrel level, the bulls may simply not have enough in the tank to drive prices significantly higher given the current supply/demand situation. Should crude oil roll over once again, global equity markets could potentially see another round of selling set in. Further declines and volatility in equity markets could potentially drive buying in gold and silver and other perceived safe haven assets.

In addition to the crude oil markets, investors will continue to watch any developments out of China very closely. The yuan fell for a fourth day as the nation’s central bank cut its daily fixing. Recent data suggested further outflows of capital from China, although the outflows did not appear to be as significant as some had expected.

The path of least resistance for silver still appears to be higher. Following some recent selling that drove prices back down to the $15 per ounce level, silver has bounced back the last two days. While silver failed at a recent attempt to crack the $16 per ounce level, the market may be headed right back for another try. A break above this level could potentially set the stage for much higher prices and further buying could possibly be seen on strength in silver. Recent strength in gold will also likely lend support to silver, and both of these markets appear to be remaining in “buy the dips” mode.