Silver prices are relatively stagnant today as the precious metals markets appear to be consolidating before another potential move higher. Metals have seen a slight bid come into prices today as GDP for the first quarter came in well below analyst expectations. Consensus estimates were looking for a reading of -1.8 percent however actual GDP came in at -2.9 percent. The steep decline was attributed to the particularly nasty winter seen in the U.S. this year and was downplayed. In addition to the disappointing GDP figure, durable goods orders also disappointed markets. The reading came in at -1 percent while consensus estimates were looking for a reading of .4 percent.
The poor data did not appear to faze stock investors much. As of this post stocks are moving higher once again. Bonds and notes are rising, however, as interest rates are falling. The dollar index is a bit weaker today which could also be adding some buying interest in the precious metals. This poor data would seem to reiterate Janet Yellen’s recent comments that the economy still requires the Fed’s assistance to continue on its present course. The notion of interest rates remaining low for the foreseeable future is a gold and silver positive.
Silver and gold also continue to benefit from geopolitical risks and some safe-haven buying. The situation in Iraq continues to deteriorate and that along with rising crude oil prices may have some investors a bit tense. Ongoing instability in the region could potentially drive oil higher. The black gold market would likely see heavy resistance in the neighborhood of $110 per barrel, but a breach above could potentially see prices soar. Rising oil may be positive for silver and precious metals as investors start to become more concerned about rising prices. The situation in Ukraine is also likely adding some bullish fuel to the fire and may continue to do so until a resolution is found.
The dip in silver prices earlier in the session appeared to be bought up pretty quickly. The market appears to be consolidating recent gains, however, it does also seem at this point that buyers are willing to step in and buy any dips. The $21.63 area becomes a next possible near term target for the bulls, while near term support in silver may be found in the $20.58 and $20.43 areas. Stronger support in silver could potentially be seen in the $20 area.
A replacement for the traditional silver fix procedure appears to be closer. The LBMA will now be examining seven different presentations and soliciting its members for opinions. A consensus may be announced sometime in July.