Silver futures rallied to the highest level and managed to settled abv 56000 mark extending strong gains from the previous session after the Federal Reserve pledged on Wednesday to keep rates at historically low levels until at least late 2014, a year longer than it had previously stated.
At the conclusion of Wednesday’s policy-setting meeting, the FOMC said in a statement that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013.
At his press conference following the decision, Fed Chairman said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.”
The comments fuelled speculation that the central bank may embark on a third round of quantitative easing, sparking a rally in Gold prices.
The central bank will provide an explicit discussion of FOMC member expectations for the balance sheet when the minutes to this meeting are released on February 15.
The Fed also left interest rates unchanged near zero, where they have been since December 2008, and set a long-term inflation goal of 2%.
Now technically market is trading in the range as RSI for 18days is currently indicating 64.29, where as 50DMA is at 54010 and Silver is trading above the same and getting support at 55193 and below could see a test of 53975 level, And resistance is now likely to be seen at 57107, a move above could see prices testing 57803.
Trading Ideas:
Silver trading range is 53975-57803.
Silver rallied and managed to settled abv 56000 mark after the Fed keep rates at historically low.
The Fed also left interest rates unchanged near zero, where they have been since Dec 2008, and set a long-term inflation goal of 2%.
The comments fuelled speculation that central bank may embark on third round of QE sparking a rally in prices
Courtesy: Kedia Commodities
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