Feb 25, 2013, 06.04 PM | Source: Moneycontrol.com
Mecklai graph of the day: Silver extended its losses after minutes from the Fed’s last meeting revealed "many" FOMC members were concerned about the risks of further asset purchases.
Jamal Mecklai (more)
CEO, Mecklai Financial | Capital Expertise: Currencies
Silver extended its losses after minutes from the Fed’s last meeting revealed "many" (an upgrade from "several") FOMC members were concerned about the risks of further asset purchases. In addition, a "number" of them suggested that the FOMC could "taper or end" QE before a substantial improvement in the labour market occurred. As expected, the dollar shot higher following these remarks and this put further downward pressure on all QE-inflated-assets. But the sell-off in Silver looked overdone and today price ($29) managed to bounce slightly as the sellers covered more of their short positions and the buyers slowly returned. Long term Silver bulls remain hopeful that price would finish the week above $26, just like the previous bearish phases in 2011 and 2012. There is also a long-term trend line coming into play around the current levels which may offer additional support. But if this bullish scenario does not come to fruition then the bears will have $21 on their radar. Silver found support around $28.25/30, which was the point of origin of breakout we saw in the summer.
Below graph shows movement of Silver since Jan 2013
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