Silver rebound was helped by a stronger euro and upbeat news from Italy, where the government won a confidence vote on austerity measures in the lower house.
The recovery comes after four days of losses in which metals tumbled to a five-month low as investors sold off precious metals and euros in favor of dollar-denominated cash due to fears that Europe's battered banks would run short of dollars.
Fitch Ratings on Friday cut its outlook on France and said it might downgrade the ratings of Italy, Belgium, Ireland, Spain, Slovenia and Cyprus blaming the lack of comprehensive solution to Europe's sovereign debt crisis.
Technically extreme oversold conditions were exasperated, in the precious metal, when commodities plunged earlier in the week; setting up a classic technical rebound. Silver closed higher at 53714, but on a closing basis was not able to clear resistance at 54000, the 61.8% Fibonacci retracement of the Sept-Oct uptrend.
On the weekly chart, silver closed lower but is technically still trading sideways in a consolidation pattern. Key support for Silver sits at the September 26th low around 52000.
Now technically market is trading in the range as RSI for 18days is currently indicating 40.45, where as 50DMA is at 57152.7 and silver is trading below the same and getting support at 53553 and below could see a test of 53391 level, And resistance is now likely to be seen at 53823, a move above could see prices testing 53931.
Trading Ideas:
Silver trading range is 53391-53931.
Silver rebound was helped by stronger euro and upbeat news from Italy
Technically extreme oversold conditions were exasperated, in precious metal, when commodities plunged earlier in week
Fitch Ratings cut its outlook on France and said it might downgrade ratings of Italy, Belgium, Ireland, Spain, Slovenia and Cyprus
Courtesy: Kedia Commodities
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