Better Economic Data Pushes Silver to Four Week High

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Risk on Attitude Boosts Commodities Complex, Funds Increase Silver Positions As Comex Lower Silver Margins Take Effect, Silver Makes New Four Week High, Better Economic Data Strengthens Silver.

Better Economic Data Strengthens Silver to Four Week HighSilver gave investors a lot to be thankful for on the Thanksgiving week that ended Friday, November 23rd.

The white metal started strong right away when it gapped up from the prior week’s spot close of $32.33 to finish Friday 11/23 spot market close at $34.13.

This represented an over five and a half percent gain in silver prices for the week. Silver is now firmly back in bullish territory thanks to this advance.

The precious metal saw prices lifted by a new pro risk attitude that boosted commodities in general, by funds that increased their silver positions as the new lower COMEX exchange silver margins took effect, by silver blowing through its four week high, and by stronger economic data from around the globe for the week.

Risk on Attitude Boosts Commodities Complex

Monday saw a new pro risk attitude in the markets in general. This mostly resulted from belief that President Obama and members of Congress are progressing to an agreement to sidestep the much feared fiscal cliff of both cuts in spending and higher taxes.

As analysts began to look at the possibility that such a deal could happen in early December, the world markets and commodities markets rose strongly on Monday. Silver jumped alongside them and even gapped up almost ninety cents from its previous spot market close that first trading day of the week.

Funds Increase Silver Positions As Comex Lower Silver Margins Take Effect

It only helps silver prices when the major speculative fund investors pile on more long silver positions. This past week, the commitment of futures traders report showed that funds increased their holdings of silver for the first time in five weeks. In all of the previous four weeks, funds had reduced such silver holdings.

This positive announcement came out against a backdrop of reduced silver margins for speculators on the COMEX exchange that took effect this past Monday the 19th.  Speculators and large investors can now initiate and hold silver positions for about twenty-five percent less money than they needed to put up the week before. Both of these developments were significantly bullish for silver prices.

Silver Makes New Four Week High

Silver also broke above its four week high this past Monday. This gave the white metal new technical power just as it started the week. By Friday, even with some ups and downs in between, silver had made yet another four week high and even managed to break above its significant resistance at $33.50. With the close of the spot market Friday, it was over $34 per ounce.

Better Economic Data Strengthens Silver

Even though U.S. markets were closed for Thanksgiving, economic data from around the world continued to come out and point towards better economic conditions than some had recently feared. China’s manufacturing PMI rose above the key 50 level which showed expansion.

The German business sentiment data came out improved after falling significantly in the previous report. There was also an increased hope for a deal in the Eurozone to aid debt strapped Greece.

With thinner market conditions and lower volume because of closed U.S. markets at the end of the week, the moves in silver to the upside were exaggerated even more from the stronger economic data that benefits the industrial use metal.

Take Away On Silver Market Prices

Silver posted a banner week this past week after it had struggled in the previous month to regain its footing. The strong start from positive investor sentiment early in the week carried over through easier margin requirements of silver, larger positions that funds had taken, new monthly highs in the white metal, and stronger global economic data that came out by the end of the week.

Once it crossed and closed above $33.50, the white metal was up, up, and away. Silver is now solidly back in bullish territory where it should stay so long as the fundamental data continues to be strong while technical data also supports the precious metal.

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