Silver prices are trading slightly lower this morning as a lack of fresh bullish inputs takes its toll on the market. In addition, stocks are once again moving higher this morning, and it appears that the seesaw of risk on/risk off continues. The metals have had a hard time gaining any real bullish upside momentum in the face of higher equity markets, and this trend could potentially continue. Although stocks may not continue to go up forever, one has to wonder just how much gas may be left in the tank. Perhaps the silver and gold markets are biding their time until such a time when equities begin trending lower again-we shall see.
This week has been a relatively light data week thus far. Later this afternoon, markets will get the latest FOMC minutes which could prove to be the data highlight of the week. Although nothing different of significance is expected, investors will be examining the minutes closely for clues about the Fed’s opinion on the economy, and for any clues as to the Fed’s plans with regards to further tapering of its bond purchases as well as the interest rate outlook moving forward. The precious metals markets in particular will be looking to see if the Fed’s comments appear to be more in the hawkish camp or more in the dovish camp.
The FOMC minutes will be followed up tomorrow and Friday with various housing data, leading indicators and weekly jobless claims. Investors will be looking for continued improvement in the labor market, and housing will be watched closely as well as the housing market which appears to be hitting some bumps in the road recently.
The ongoing situation in Ukraine remains a focus for global markets. Although the violence appears to have remained mostly contained, the situation has the potential for escalation at any point. Russia will likely be facing further economic sanctions and any interference from Moscow in the upcoming Ukrainian elections may be met with further economic penalties.
Silver, and gold for that matter, have remained range bound and look quite comfortable in their current ranges. Gold has been coiling up in recent weeks potentially indicating a breakout in one direction or the other, but silver looks somewhat stuck in its current range. Perhaps a gold breakout may help the silver bulls or the silver bears push prices outside of the current range.The $20.50 level remains a key level to watch on the upside in silver, while the $19 level remains an important level to watch on the downside.