Barclays Medium Term Forecast for Silver Offers Support

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Silver Weakens Further As Dollar Strengthens On Jobs Report, Silver Weekly Downtrend Continues to Hurt Prices, Barclays Medium Term Forecast for Silver Offers Support, Silver Holds $31.00 Technical Support.

Barclays Medium Term Forecast for Silver Offers SupportSilver continued its technically inspired sell off for the week that ended Friday, November 2nd. The white metal had finished the week before at $32.07 when spot markets closed.

This past week, silver spot markets opened at $31.97 before beginning an over one dollar per ounce plunge that saw the precious metal tumble to close Friday spot market at $30.92.

This continued liquidation of silver appears more serious than it really is so far, though the metal has taken some knocks. Silver weakened as the dollar strengthened on economic data out of the U.S. and the weekly downtrend on the charts continued.

There was support offered by a Barclays outlook update on the metal and an important technical level that buoyed prices at the end of 11/2.

Silver Weakens Further As Dollar Strengthens On Jobs Report

Commodities like silver priced in dollars are often hostage to the greenback as it strengthens or weakens appreciably. This certainly proved to be the case after a better than anticipated jobs report emerged Friday. Analysts had expected to see 125,000 new jobs created, but 171,000 new positions actually materialized. The labor department also revised up the September numbers for non farm payrolls.

In the wake of this, some watchers and investors considered that the easy money policies of the U.S. government could eventually end after four years of them so far.  The dollar rose on the relatively good and better than anticipated economic news, and safe havens like silver retreated.

Silver actually performed better than gold in the selloff, as silver benefits to a great degree when the world economy is perceived to improve. This is because of the thousands of industrial uses for silver that gold simply does not have to fall back on when investment demand stalls.

Silver Weekly Downtrend Continues to Hurt Prices

Silver entered a downtrend a few weeks ago. This has now stretched into a four week long trend based on the daily charts. Technical traders in silver watch these trends, and they do determine a great deal of the short term movements in the metal. Over the long term, these daily and weekly gyrations may amount to noise, but for now, they are keeping the white metal under pressure.

Once silver broke below the $32.00 and then $31.50 support levels, it only intensified the move down at the end of the week. For silver to recover into near term bullish mode, it needs to break back above the $32.50 per ounce high seen last week. This is now acting as resistance.

Barclays Medium Term Forecast for Silver Offers Support

Meanwhile, silver’s setbacks were limited in part because of a bullish medium term outlook update from Barclays Capital. As one of the largest retail and investment banks in the world, when Barclays speaks, investors listen carefully. Their technical analysts stated that they are bullish in the medium term on silver and gold based on their charts.

They anticipate that there will be buyers who show interest in silver at $31 per ounce who will keep the silver medium term spotlight on a move back up to the $33.35 to $35.40 per ounce range.

Silver Holds $31.00 Technical Support

In light of the Barclays Capital announcement, and the obvious technical support that lies at $31, it should not surprise you to learn that silver pulled out of its sharp slide Friday, November 2nd. The metal managed to close right about $31 at $30.92. This next week will be critical to watch silver continue to hold above this important technical support line.

Take Away On Silver Market Prices

Silver experienced another week of setbacks on the week that closed out November 2nd. This past week saw it break down below $32.00 and $31.50 per ounce by the close of spot last Friday. Stronger U.S. data can be either a boost or a blow to the white metal. This depends on whether investors look at it as a safe haven or an industrial use commodity.

Barclays helped to underscore a line in the sand for silver when they proclaimed that buyers will emerge at $31, and this will help to move the metal back up towards the $33.35 to $35.40 per ounce price objectives.

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