Silver once again plunged on Wednesday, dragging the price of white metal to less than $19.50 an ounce ahead of some major economic releases. The sentiment remains bearish due to Lower High and Lower Low in the recent waves.
As of this writing, the precious metal is being traded around $19.46 an ounce. A support can be noted around $18.66 an ounce, the swing low of the recent correction wave as demonstrated in the following chart. It is however pertinent to mention here that fresh 2014-low may not be in play considering the concerns about the supply of the white metal.
On the upside, the pair is likely to face a hurdle near $19.70, the 23.6% fib level ahead of $20.00, the confluence of 100 Daily Simple Moving Average (DSMA) and psychological number and then $20.34, the 38.2% fib level. The sentiment will remain bearish as far as the $21.57 resistance area is intact.
Today the Federal Reserve of the United States is due to release the minutes from the recent Federal Open Market Committee (FOMC) monetary policy meeting. Investors are curiously waiting for the minutes in order to analyze the future monetary policy stance of the world’s largest economy. The comments from the policymakers about the first rate hike will be of great interest. Generally speaking, bullish FOMC minutes are considered bearish for the silver and vice versa.
Fed Manufacturing Index
Philadelphia Fed will release the manufacturing index report tomorrow. According to the average forecast of different economists, the manufacturing index remained 20.3 points in July as compared to 23.9 points in the month before. Generally speaking, higher manufacturing index reading is considered bearish for Silver and vice versa.
Considering the overall technical and fundamental outlook, buying the precious metal around the $19.00 handle appears to be a good strategy in short to medium term.