Wednesday, March 23, 2016 11:11 AM EST
Silver prices have nearly given back 61.8% of last week’s gains and the main motivator for the rally on March 16 was the set of dovish comments that emerged from the Federal Reserve. The central bank lowered the amount of rate hikes that they are now expecting to implement in 2016. Specifically, they referenced that rate hike implementations would be lowered from four down to two.
The lowering of rate hike volume than that which was previously anticipated, triggered a softer USD and a stronger silver price. This bullish driver for silver prices is still in place.
Technical Trend
The technical trend is bullish, and has been since January 2016. The rationale behind this, is that price is still trading above the March 16 low. The current decline may therefore be viewed as a correction within the upward trend and could be short-term in nature.
We note that price has given back close to 61.8% of its gains and some technical traders may use the 61.8% and 50% Fibonacci retracement levels as an indication as to the levels at which price could bounce.
For the trend to turn bearish, the March 16 low of $15.22 would need to give way and if this happens, price may reach the next support level which is the March 3 low of 14.87.
U.S. Data on Tap
U.S. New home sales are seen rising by 3.2% MoM according to a Bloomberg news poll, while U.S. Crude Oil Inventories are expected to gain 2.53 million barrels.
Silver Price | FXCM: XAG/USD
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
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Yeah, it is definitely a manipulated market. Something like 200+ times more paper assets than actual physical silver. Not sure when the day will come, but I imagine when the Ponzi scheme run its course, silver will go up in price more than people can imagine. I have been accumulating physical silver since last year.
Generally those wanting to push down gold settle to playing with silver because their purse strings are short and they get better bang for their buck manipulating silver. Someday they will pay for it, most likely when the market collapses again and the banks force taxpayers to pay for their bad bets like last time they got blown out in heavy metals in the last downturn. Taxpayers end up footing the bill.