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Silver/Gold Breaking Correlation
Silver prices are today breaking from their typical correlation with gold. While the yellow metal has come under pressure on Monday, silver prices are trading higher. The move has been attributed to position covering ahead of upcoming major data with moves being exacerbated in low volume markets due to China being offline for the Lunar New Year holiday.
Plenty Of Key Data
Looking ahead this week, there is plenty of market moving data for metals traders to keep an eye on. US CPI tomorrow will be the main release, followed by US retail sales midweek and PPI later in the week. With traders currently battling to establish a firm view on when the Fed is likely to start easing, this week’s data holds plenty of volatility risk. If further strength is seen in upcoming data, this should dilute near-term rate cut expectations, sending USD higher and weighing on metals prices.
Risk Flows On Watch
Traders will also be keeping an eye on global risk flows. The conflict in the Middle East, the US earnings season and the potential for fresh China stimulus are all key factors to watch this week. While risk markets are holding up well for now, any strong US data this week could easily see these moves being reversed as traders push their Fed easing expectations further out.
Technical Views
Silver
The latest test of the 22.3205 level has seen the area continuing to hold as support. With price trading back within the bear channel, bearish risks remain unless bulls can get back above the 23.7419 level, turning focus to the bigger target at 25.1094.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.