Silver dropped almost -1% in the line of expectation getting pressure from dollar strength generally depresses commodity prices, as it decreases their appeal as an alternative asset and makes dollar priced commodities more expensive for holders of other currencies.
Earlier, Portugal’s ten year bonds soared 199 basis points hitting a euro era record of 17.22%. Credit default swaps also climbed to a record in the struggling nation, indicating a 71% chance the government will default, adding the safe haven appeal of the precious metal.
However, PM calmed the markets by saying the debt is “perfectly sustainable” and there is no risk of writedowns on the bonds.
European leaders meeting in Brussels reached an agreement on a fiscal discipline treaty that includes sanctions for high deficit states and demands members to create laws to limit budget shortfalls.
In addition, the leaders also decided to launch the European Stability Mechanism on July 1st, one year ahead of the original plan.
However, Britain and the Czech Republic refrained from agreeing with the treaty.
Now technically market is trading in the range as RSI for 18days is currently indicating 60.06, where as 50DMA is at 53970 and Silver is trading above the same and getting support at 55859 and below could see a test of 55296 level, And resistance is now likely to be seen at 57237, a move above could see prices testing 58052.
Trading Ideas:
Silver trading range is 55297-58053.
Silver dropped in the line of expectation getting pressure from dollar strength generally depresses commodity prices
PM calmed the markets by saying the debt is “perfectly sustainable” and there is no risk of writedowns on the bonds
EU leaders meeting in Brussels reached an agreement on fiscal discipline treaty that includes sanctions for high deficit states
Courtesy: Kedia Commodities
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