Speculation Bank of Japan Will Ease Further Supports Silver

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Silver Follows Gold Lower on Commodities Technical Selling Early in Week, New York Times Rumors on Bernake’s Future Send Precious Metals Prices Lower, Federal Reserve Leaves Easy Money Policies in Place, Speculation Bank of Japan Will Ease Further Supports Silver, Silver Holds Above $31.50 Technical Support and Rebounds.

Speculation Bank of Japan Will Ease Further Supports SilverSilver looked set for another downward move in the week that ended Friday, October 26th. It had closed the spot markets a week earlier on October 19th at $32.06. After the silver prices started the week higher at $32.45 and declined at one point to almost $31.50, the metal found its footing to end spot market trade on October 26th at $32.07.

The white metal managed to hold its own and close at even in a week that saw numerous pressures on the precious metals. This past week, silver reacted to technical selling that hit gold hard, rumors about the Federal Reserve chairman’s future, a Federal Reserve Board meeting, talk of additional Japanese quantitative easing, and a technical support level that buoyed the white metal by the end of the week.

Silver Follows Gold Lower on Commodities Technical Selling Early in Week

The early week was not kind to gold or silver. Early in the week, gold succumbed to technical selling levels and made a new six week low by Tuesday early trading session. Silver followed in its big brother’s footsteps this time, where it has led gold in past weeks.

Silver and the precious metals also suffered from risk aversion that caused the commodities sector in general to take a hit. While silver and gold are safe haven metals in general, silver also demonstrates its properties as a heavily used industrial metal other times and can suffer when risk appetite declines.

New York Times Rumors on Bernake’s Future Send Precious Metals Prices Lower

A report surfaced in the New York Times this past week concerning Federal Reserve Chairman Ben Bernake. They claimed that Ben Bernake will not seek an additional term as U.S. Central Bank head.

Ben Bernake has been among the chief proponents of quantitative easing, which simply means that he encourages the government to print more money to prop up the still ailing US economy. Silver and gold declined on the idea that an end may eventually come to the central bank money printing spree sooner than many analysts and investors believe.

Federal Reserve Leaves Easy Money Policies in Place

Meanwhile, Ben Bernake held another meeting of his Federal Reserve around the same time as the rumors that surrounded his future there surfaced. In the monthly open market meeting where they set interest rates and discuss the future of these rates, they elected to keep the rates in the historically low zero to .25 percent range.

They also stated that they will continue to print money to buy up Treasuries and mortgage backed securities until further notice.  Analysts had expected this, but some had thought that they would signal an earlier end to the ultra loose monetary policy.

The decision to continue with the money printing and easy money through the middle of 2015 (at least for now) supported silver, helped to halt its slide, and even turned it around. The reaffirmation was very bullish for the precious metals after a hard week.

Speculation Bank of Japan Will Ease Further Supports Silver

On the theme of easy money, the Bank if Japan considered that it might again throw in its lot with the Federal Reserve. There has been speculation that they might print more money to support the Japanese economy.

The Nikkei newspaper claimed that the Japanese Central Bank will potentially increase the amount of assets that it purchases with newly created money. The more central banks elect to print money, the more silver finds support, even after weeks of price declines.

Silver Holds Above $31.50 Technical Support and Rebounds

Some analysts have noised about silver support levels at $31.50. This week, the white metal came close to a test of that point. Within twenty cents of the technical support, the precious metal turned up and rebounded to over $32 per ounce. Should silver fail its subsequent test of $31.50 in the next week, there is still the $31.00 solid technical support in place.

Take Away On Silver Market Prices

In the last few weeks, silver has suffered from a new three week long downtrend that began to emerge on the daily charts. Technically, the metal has run out of steam in the short term and succumbed to selling pressure along with gold.

The long term fundamental outlook for the metal has not changed though. So long as the central banks continue to print more money at the Federal Reserve, European Central Bank, Bank of England, and Bank of Japan to name a few, prospects for a silver market recovery are just around the corner.

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