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Dollar Strength Likely To Keep Silver Prices In Check

By Abhishek BansalCommoditiesJul 23, 2021 02:31AM ET
www.investing.com/analysis/dollar-strength-likely-to-keep-silver-prices-in-check-200593174
Dollar Strength Likely To Keep Silver Prices In Check
By Abhishek Bansal   |  Jul 23, 2021 02:31AM ET
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Silver prices are currently hovering at $25.40, up slightly from their previous low of $24.79. Commodity prices are being held in check by the strength of the US dollar index. The dollar index futures are presently trading near 92.915, a significant increase from the recent low of 89.515 set in May of this year. The price of the US 10-year bond yield has likewise rebounded from its recent low of 1.128, sitting at 1.268.

Precious metals have gained support from global central banks' easy monetary policy, which is anticipated to keep significant liquidity in the system. The European Central Bank (ECB) indicated that it will keep its loose monetary policies in place for a little longer. In the short term, the large slack in the economy is holding back inflationary pressures, and the medium-term inflation outlook is well below the ECB's aim, according to ECB President Lagarde.

On the economic front, US weekly initial jobless claims unexpectedly increased by 51,000 to a 2-month high of 419,000, indicating a weaker labour market than predicted. In addition, the June Chicago Fed national activity index unexpectedly dropped -0.17 to 0.09, missing forecasts of a 0.30 increase. In addition, existing-home sales increased by 1.4 percent month over month to 5.86 million, falling short of estimates of 5.90 million.

According to the CFTC Commitments of Traders report, the net long position in silver futures fell by 799 contracts to 43689 contracts for the week ending July 16th. 1744 contracts were removed from the short position and 2543 contracts were placed to the speculative long position.

Silver prices are expected to find strong support between $24.86-24.66, while resistance is expected near the 50-day EMA at $26.28 and the 100-day EMA at $26.49.

Dollar Strength Likely To Keep Silver Prices In Check
 

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Dollar Strength Likely To Keep Silver Prices In Check

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Disclaimer: Mr. Abhishek Bansal is a new-age, first-generation entrepreneur, and the Founder Chairman of Abans Group, a quintessential diversified business group, providing expertise in Broking Services, Non-Banking Financial Dealings, Financial Services, Agri-Commodity Services, Warehousing, Realty & Infrastructure, Gold Dore Refinery & Manufacturing, and Trading in Metal Products, Pharmaceuticals, Software Development & Wealth Management.
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