Silver (and Gold) look to the Fed for direction
Dovish Fed need for strong silver run
The run in precious metals of late has made sense as the major central banks turn dovish. With interest rates falling and bond yields reaching negative territory the allure of the metals once again calls. Justin flagged up on Thursday last week that the entire Swiss yield curve has now turned negative.The normal downside of owning gold and silver is that there is no dividend which means little incentive to hold it. However, with yield so low elsewhere the metals gain interest as safe havens. Adam has been pointing out the fundamentals for Gold for sometime, at least since December 2018 if my memory serves me right. All that is needed now is a dovish Fed and the next leg on silver (and Gold) is on.
Silver technicals and the Golden cross
The so called golden cross of the200DMA and the 50DMA has occurred on the Daily chart. A few days ago I highlighted the 16.00 level as a key technical resistance area and price has been holding up above those levels being bought on dips.
Boom or bust for silver on the Fed
Once again the Fed will set the pace for silver. If we get a 50bps, then silver will be immediately bid and bought on the dips as long as a dovish Fed picture is maintained. However, if Powell goes for a one and done insurance cut then the water's are muddied and silver will struggle to make new highs.Once again, all eyes to the Fed for direction...