Spot silver prices (XAG/USD) have continued their downwards trajectory on Wednesday in the run up to Wednesday’s pivotal Fed policy announcement, with spot prices recently dropping into the $21.50s for the first time since the end of September. Broader market sentiment is subdued pre-Fed, as is typically the case, with a softer than expected US November Retail Sales report versus a stronger than expected December NY Fed survey having been ignored. But this hasn’t been enough to stop the rot in silver markets, with spot prices now down a further 1.7% on the day despite a flat US dollar and US yields curve. That takes the precious metal’s weekly losses to about 2.7%.
As such, silver bears will be eyeing the September lows in the $21.40s and XAG/USD may well get there in advance of 1900GMT (when the Fed’s rate decision and statement is announced). If the Fed is as hawkish as many strategists suspect they will be in doubling the pace of the QE taper and indicating multiple hikes in 2022, this could further add to silver’s woes. A break below $21.40 brings in sight the next key support in the form of the June highs around $21.15. If that level goes, it’s a clean run lower to the early September high just above $19.50.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2022 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.