It has been another range-bound week for silver. On Monday, the metal lost $0.53 for a final New York spot price of $33.98. The metal closed $0.08 lower on Tuesday only to turn around and gain back the same eight cents for the close on Wednesday. Silver continues to travel intraday, but still cannot move higher. And while its price action this week may not have been notable, the number of warnings issued about what could lie in store for the metal are significant.
Silver appears to need fundamental news to move higher, but has failed to find it. In its absence, the metal has turned to tracking other crowds; this week, silver took direction from
, which also came under pressure. The white metal then turned to US equities, which didn't work out well given the downside reversal on Tuesday.
Instead of struggling to breach $35, this week silver spent much of its time below $34 with market participants insisting that the bulls had best gather some force soon.
“We are watching support at $33.37, the low from September 26th, as a breach through there on a closing basis could indicate a double-top in silver, which would target the low $31.00 level,” states a Scotiabank market note.
Double top is a technical term that refers to price action that forms an “M” pattern on a chart due to a price rise, decline, second rise and second decline.
Others are citing concerns about the futures market.
Net speculative length for COMEX silver continues to rise. Commodity Futures Trading Commission data shows that during the week ended October 2, 763.2 metric tons were added while 439.2 MT were stacked on the long side and 324 tons were unwound from the short side.