EDITOR NOTE: Forces are conspiring to help drive silver prices up in the back half of 2021. The value of the dollar moved lower, and the jobs numbers came in much lower than expected (silver is a great historic hedge against inflation) and manufacturing in the U.S. did better than anticipated (an industry that uses silver). In addition to these base reasons, there are several technical factors based on silver price trends that explain why this is happening and how these trends should continue to buoy silver prices. The big takeaway is, silver is on the move, so if you are watching the trends and see where precious metals are heading, now might be a great time to stock up on non-CUSIP silver and gold.
Silver prices moved higher following mixed data that showed that manufacturing in the U.S. was stronger than expected. The dollar moved lower which helped buoy silver prices despite lackluster gains in gold prices. ADP private payrolls were weaker than expected which initially weighed on U.S. Treasury yields.
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Silver prices edged higher and continued to consolidate with resistance seen near the breakdown level at 24.42. Additional resistance is seen near the 50-day moving average at 25.00. Support is seen near the 10-day moving average at 23.75. Prices are overbought as the fast stochastic is printing a reading of 80, above the overbought trigger level of 85 and could foreshadow a correction. The fast stochastic generated a crossover sell signal which reflects accelerating negative momentum. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This buy signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).
ISM Manufacturing Beat Expectations
U.S. manufacturing activity unexpectedly picked up in August. The ISM said its index of national factory activity inched up to 59.9 last month from a reading of 59.5 in July. Expectations had been for the the index to decline to 58.6. The ISM survey’s forward-looking new orders sub-index rebounded to a reading of 66.7. The survey’s measure of prices paid by manufacturers fell to an eight-month low of 79.4 from a reading of 85.7 in July. This measure has dropped from a record 92.1 in June.
Originally posted on FX Empire