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We had been enjoying one of the longest winning streaks for silver in recent times, with the white metal surging from $19/oz during the first-half of February. However, the picture has darkened considerably in the aftermath of the latest set of minutes from the Fed, when some members of the committee suggested that the time might be near for an increase in interest rates. This is far too premature really, but it was sufficient to prompt a mini-rout in precious metals.
The recent push through the 200-day moving average on 14 February is, ostensibly, a positive sign, but I wouldn’t say investors have fallen in love with the metal just yet. The 50-day moving average remains pointing upwards, but a crossover above the 200-DMA would be needed to fully reinforce the positive outlook.
The clear failure to push beyond $22 per ounce suggests the downside has now been opened up for silver, at least in the short-term. This would suggest that $20.50/oz is the area to watch in terms of support.