Silver prices | Silver Prices Jump Through $20, Yellen Fed "Gold Supportive" as ...

Silver Prices Jump Through $20, Yellen Fed "Gold Supportive" as ...

Posted: 19 Jun 2014 07:29 AM PDT

SILVER PRICES led gold higher Thursday in London, rising 2.6% from last week's finish to break above $20 per ounce for the first time in two months as world stocks, bonds and commodities rose following yesterday's unsurprising US Federal Reserve decision.

Holding rates between 0% and 0.25% for the 66th month running, "Janet Yellen delivered a meticulously balanced message yesterday which was supportive for gold," says a commodities note from French investment and bullion bank Natixis.

Fed bond purchases for the coming month were cut by $10 billion to $35bn – just below the monthly addition to the Fed's asset purchases made in September 2012's so-called "QE3" – while Yellen again stressed that interest rates won't rise any time soon.

"The vote was unanimous," notes one bullion dealing desk. "So even with significant personnel changes the Fed remains in harmony."

Wall Street's S&P 500 stock index ended Wednesday at new all-time highs, with most Asian and European stockmarkets following sharply higher on Thursday as government bond prices also rose, nudging interest rates down.

Crude oil pulled broad commodity benchmarks to 8- and 9-month highs as the US Dollar fell to 1-month lows vs. the Euro and near 6-year lows to the Pound, and the Iraqi army continued battling ISIS militants at the key Baiji refinery just north of Baghdad.

Both gold and silver prices ticked higher in late US trade last night, before flattening in Asia only to rise in London and then jump as New York re-opened Thursday.

Gold hit its highest level in almost 4 weeks at $1295 per ounce. Silver prices rose 30 cents in 90 minutes, hitting $20.24 per ounce – the highest level since 10 April.

Speculative "short betting" against silver prices earlier this month hit all-time record levels, with hedge funds and other non-industry players holding bearish contracts worth $4.2 billion on official US data.

"Momentum indicators are bullish, suggestive of acceleration," said Scotia Mocatta's technical analysis of silver prices overnight, looking "to $20.00 as the next key upside level."

"Silver following gold," said Standard Bank's London team Thursday lunchtime, "up through the 100-day moving average at $20 and similarly running into very light selling."

"Turning neutral/bearish at these levels," the note adds. "Would expect seasonality to kick in: silver up 7% month-on-month at this point is unusual."

While physical gold demand in China has been muted however, according to several wholesale dealers' reports, "bullish silver price expectations" are driving strong imports of the white metal into India, says the latest Precious Metals Weekly from London-HQ'ed consultancy Metals Focus.

After jumping on consumer substitution from gold as India's anti-gold import rules hit in 2013, silver bullion bar inflows to India "have largely continued to rise," says the report, "with combined January-April inflows up an impressive 27% year-on-year.

"Our field research points to strong bargain hunting purchases having emerged" on April and May's silver price drop near 3-year lows.

Silver Prices Edge Back from 5% Jump, "Short Covering" Plus Iraq ...

Posted: 20 Jun 2014 02:40 AM PDT

SILVER and gold prices eased back Friday morning in Asia and London after jumping in what analysts variously called "short covering", a response to worsening fighting in Iraq, and a reaction to this week's US Federal Reserve hinting at 0% rates well into 2015.

Both gold and silver prices yesterday made their sharpest 1-day gains since autumn 2013 as the Dollar slipped and US equities stalled near record highs.

World stock markets meantime stalled at record highs, while Treasury bonds edged down in price to nudge yields higher.

The Dollar pushed the Euro back towards $1.36, but the British Pound ticked near 5.5-year highs above $1.70.

Crude oil was on track Friday for a second weekly rise as the US sent military advisors to help the Iraqi army fight ISIS militants.

"The political turmoil in Iraq and Ukraine continues to provide support," reckons $1 billion portfolio manager Dan Denbow at the USAA Precious Metals & Minerals Fund , quoted by Bloomberg.

"But the main reason for the rally is Yellen...[The US Fed chair's] words [in Weds' press conference] worked like magic for the gold market, which has otherwise been very lackluster."

"The price rally," agrees Commerzbank's commodity analysts, "was evidently triggered by Wednesday evening's meeting of the US Federal Reserve, despite it yielding no surprise.

"These were not purchases of physical gold however, but predominantly transactions on the futures market."

Silver futures volume Thursday was twice the last month's daily average.

"There was no one factor that explained gold's large spike," reckons US broker INTL FC Stone, but "massive short covering may have played a role, particularly after key resistance levels gave way."

Another dealing desk calls it "safe haven and technical buying". But betting against silver prices by speculative traders this month hit all-time record levels.

Silver prices jumped 5.0% on Thursday, touching the highest level since mid-March at $20.93 per ounce, and pushing some $2 billion-worth of silver short positions into the red.

The Gold/Silver Ratio fell to a 3-month low, with market prices setting one ounce of gold at 64.1 ounces of silver, down sharply from May's four-year peak above 68.

"Momentum indicators [in gold] are bullish," says the New York office of Scotia Mocatta, but the Relative Strength Index "is approaching 70, suggesting that this rally is nearly overbought."

In silver prices "we expect near term support around 20.40, near...the 200-day moving average."

Silver prices | Silver Prices Jump Through $20, Yellen Fed "Gold Supportive" as ...

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