RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

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

Joshua Graves

Josh began his career in May of 2013 after graduating from Purdue University, West Lafayette. He received a degree in Agricultural Economics, with a Certificate in Entrepreneurship. He started at Paragon Investments in Kansas, the heart of wheat country. While working there he developed long term relationships with corn, soybean, and wheat producers, speaking with them on a weekly basis. His goal was to market their physical production more effectively through tracking basis, as well as hedge their exposure in the grain and cattle markets through a variety of futures and option strategies. He then moved to Florida to work for PFL Petroleum, a physical biofuels brokerage, and gained significant exposure to OTC and physical energy markets. Trading has been a passion from day one of his career. In his free time he stays active in downtown Chicago, attends sporting events, and holds an FAA Private Pilot’s License and flies Cirrus and Cessna aircraft regularly.