September Silver, Is A Break Above $17.00 Coming?

August 4, 2017 9:08AM CDT

The silver market has enjoyed the recent run up in gold and other precious metals from most recent low of just over $15. The question is, with the recent break from 16.96 are we going to get another shot at breaking 17? Let’s first take a look at the fundamental news that might continue to drive the market higher. The first and most obvious to me is a potential pullback in the stock market as stocks are now trading with sky high valuations, and no sign of any pulling back. The gold demand in India tends to pick up near the end of the summer with the autumn festivals starting, and this could see some buying interest in silver as well. North Korea is another supportive factor with another recent ICBM launch being reported and triggering more buying interest in safe havens. ADP non-farm payrolls figures have just come out this morning, and a very healthy 209,000 number was reported. Its well above the consensus of 178,000 that most analysts were expecting. We are currently seeing the metals complex under much pressure because of this quite positive number. The fundamentals as a whole are a mixed bag, with the bears having a slight edge based on the recent US economic data. 


A technical perspective shows that a pullback toward 16.20 is more likely than a push higher. The MACD has indicated a buy signal on July 17 with the cross. We are not in overbought territory by any means, but the recent trend up is extremely weak according to the ADX which currently sits at 15.83. Look for a retest of the 16 level before we see any leg higher. Silver is likely to make a move higher in the long run, but a retest of the lows before this happens is likely. We had a key reversal that formed just two days ago, but was not “confirmed” by a lower close the following day which is necessary to validate the formation. 

Sep '17 Silver Daily Chart

Sep '17 Silver Daily Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.