Tuesday May 16, 2017 11:59
Silver continues to trade in the green, with prices heading for a fifth consecutive positive daily close, and according to one strategist, the metal may be able to score it.
“After a severe 12 percent correction over just four weeks, the commodity is enjoying a bounce that began on Wednesday. As we saw with crude oil, a pullback in the dollar is helping the commodity bounce from a deeply oversold condition,” noted Matt Maley, equity strategist at Miller Tabak, in a post on CNBC Monday.
Silver futures have been moving higher since mid-last week after hitting multi-month lows with July silver last at 16.74 an ounce, up 0.83% on the day. The last time silver prices saw five consecutive positive daily closes was just after the unexpected Brexit vote in June. Meanwhile, the U.S. Dollar Index hit a 6-month low Tuesday, last trading at 98.26.
Maley also pointed out that although crude oil has been suffering a similar pattern as silver, plunging in the past month, he maintains a positive outlook on both commodities. “[T]here is reason to believe today's respective bounces will continue,” he wrote.
For silver, Maley said speculative positioning seems to be moving in favor for higher silver prices.
“We'd also point out that that the Commitments of Traders data shows long positions held by speculators have fallen sharply over the past two weeks. Don't get us wrong; they haven't suddenly become wildly short. However, the positioning within silver right now is no longer anywhere near as bearish as it was last month,” he said.
“Thus, the selling pressure from this area should continue to abate, which raises the odds that this bounce in silver will prove to be more than simply a ‘dead cat bounce.’”