RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Metals

Pressure is on for Silver

Posted 02/15/2018 12:55PM CT | Michael O'Donnell

As of Thursday morning’s trade, the March silver contract is trading near the $16.60 level, which coincides with the two hourly bottoms on the second and sixth of this month as well as hourly tops from Tuesday.  One may also note the significant downward price action from this level in late November and rise above this level from the day after Christmas up until the January 25 high.

Should this level hold, the February 9 lows may put in a short-term bottom, especially amid yesterday’s CPI report with a 0.5% month over month increase.  Today’s PPI report also showed inflation near the top range of expectations at 0.4% month over month and 2.7% year over year, 0.1% above the 2.6% consensus estimate.  While inflation is typically bullish for metals, the forecasted increase in yields, which metals do not pay, should be considered as well.  This is especially so given the 10-year yield reaching a four year high of 2.92%.  Of course, dollar weakness and strength should be monitored as well given their effect on commodities and metals prices.

Going forward, silver traders and the market as a whole will continue to monitor such inflationary pressures as well as the dollar, Fed speak and the like.

Silver May ’18 60min Chart

silver_may18_60min_chart

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Michael O'Donnell

Senior Market Strategist
Mike started his career in the markets on the floor of the Chicago Board of Trade as a trade checker for a local market maker in the Dow Futures pit. This led to interning with an independent introducing broker and going on to work with a number of market participants including: speculating clients, hedge clients, introducing brokers, futures commission merchants, commodity trading advisors, proprietary traders, trading educators, system creators, and a number of international financial market participants.
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