Last week, silver contracts finished the trading sessions with close prices on the positive break-even side.
On Friday the white metal ran higher. The better than expected US economic reports failed to weaken this trend. Also the four record days of Dow Jones Industrial Average setting were insignificant for the precious metal. Therefore, silver kept its safe-haven appeal during the last trading session.
At the first day of the new trading week, spot silver prices per ounce were trending lower. Spot silver dropped by 0.4% to trade at $28.85 per ounce.
Due to silver’s high volatility, the precious metal attracted investors’ attention. Hence, physical metal and silver mining stocks are the primary interest target of active traders at the moment.
At present, market factors are still struggling to give direction to silver prices. The higher than expected US employment report is also in the list of weakening factors. The jobs data showed that the US economy added 236,000 workers in February.
In respect, the report provided improvement evidence and successfully raised the greenback index.
That was bearish news for the white metal pricing. Yet, the Federal Reserve is still pouring $85 billion into the country’s economy every month. Therefore, there are factors which also support the bullish side of silver.
It is very likely that the short-term volatility to increase in the current uncertain situation. Though, general economic weakness and significant industrial demand still support the long-term projections.
According to analysts, the weaker precious metal performance is based on Chinese economic data posted during the weekend. The announced economic figures caused no support to the metal prices. In February China’s consumer price inflation jumped to 3.2% on year over year basis. The yearly industrial production growth was 9.9% in January-February. That rate was down from 10.3% recorded at 2012 end. In respect, the Chinese industry recorded its weakest year start since four years. This is a bad sign as silver has strong industrial value.
Though, from technical point of view, bears for May silver contracts have advantage. At present, the white metal prices are in a downtrend for seven consecutive weeks. Yet, prices have been trading sideways. Also, silver is staying above key support, at the March low of $27.925 per ounce. Firm technical resistance at $29.495 is next upside price bull escape. Resistance is projected at a level of $29.085 with support at $28.80 per ounce.
