Wednesday morning, the silver market was bid following comments from Treasury Secretary Steven Mnuchin that a weaker dollar may be good for the United States. For US exports and commodities such as silver, this was bullish news. Many have noted the recent strength in commodity prices and dollar weakness, and this news only exacerbated such strength.
As of Wednesday morning, the March Silver contract was trading near the morning’s high of $17.445 per troy ounce, up $0.71 from the prior day’s low. Many will note technical peaks neared from earlier highs this year and the highs from the second half of 2017. The levels from Wednesday morning’s trade also coincide with a trendline drawn from August 2, 2016 highs and the high of January 16, 2018. Along with these levels, a technician may note the gap at these levels from 2017’s September 15- 18 weekend just above and very near the highs of $17.45 on January 16, 2018 and October 13 2017.
While Wednesday’s dollar news and continued commodity strength, along with a breach of this trendline and these levels will have some looking to continued strength in silver, if these levels hold one must be mindful of the recent ranges and a reversion to the mean.
Silver Daily Continuation Chart