RJO FuturesCast

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Metals

Bulls Have Technical Edge in Silver

Posted 01/12/2018 9:55AM CT | Eli Tesfaye

March silver is trading 17.090, up about 12 cents on the day.  The last article, I discussed the potential of silver bottoming. It looks like the bulls have the technical edge and momentum has turned up. A weaker dollar gives added lift to the metals in general. Now that the tax reform is behind us, the next battle in Congress would be immigration and infrastructure spending. I don’t think President Trump will have a difficult time getting republican congress and some democrats to agree on shoring up the nation’s weak infrastructure. Othe markets benefiting from a weaker dollar index is copper. Both copper and silver have industrial use, therefore, will benefit from the infostructures spending.

Also, with the eurozone looking to tighten their monitory policy, the weak dollar leaves dollar-denominated metals in positive territory. As the cryptocurrency fever cools off a bit, silver is getting its opportunity to shine once again.  

The Commitment of Traders with Options report (COT) released today will probably show increasing non-commercial and non-reportable traders and will probably add to them. The last report, I mentioned that “bargain hunters can ease into the long side from these levels (16.00) with a tight risk. As I have stated before though, those who want to be long silver will be better served if they come in on strength rather than weakness.  That said, a close above 16.50 should provide that near-term lows are possibly in. I expect to see strength in Silver in coming days.”

A pullback from these levels, 17.00, will be a buying rather than a selling opportunity! 

Silver Mar ’18 Daily Chart

silver_mar18_daily_chart

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Eli Tesfaye

Senior Market Strategist
Eli started his career in the futures and options market while he was in graduate school finishing up his MBA in 2003. Eli specializes in Automatic trading strategies and systematic options trading strategies in futures market. He has been Series 3 license holder since 2005. Eli's is an avid reader, runner, and yoga practitioner.
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