Earlier this month, silver was having some difficulty breaking away from $65 per ounce. But it soared above this level on Wednesday thanks to the catalyst of the US dollar selloff. This came in the wake of the US Treasury's announcement that it was doubling its long bond repurchases with the obvious aim of driving down yields, and thereby the cost of borrowing, it hoped.
Source: TN Trader
That hasn't worked out exactly as planned. But the dollar has continued to fall, no doubt because investors reckon that the Treasury will try again. Earlier today, silver hit $70 per ounce, representing a gain of 23% from the end of last month.
As with gold, it may need to consolidate a bit to gain enough momentum to smash through $70, but like gold, it is not overbought. Nevertheless, traders should keep a close eye on the US dollar, as any bounce back in the greenback could knock some of the stuffing out of silver and gold.
* The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. To the extent permitted by law, in no event shall Trade Nation (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk. Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and, as such, is considered to be a marketing communication.
