Silver Prices Down for Second Straight Session as Uptrend Runs into Resistance

London (May 24)  Silver prices declined for a second consecutive session Wednesday in a bout of profit-taking, a sign traders were looking to buy on the dip following a multi-week uptrend.

Silver for July settlement reached a session low of $16.90 overnight. Prices were down 12 cents, or 0.7%, at $17.01 a troy ounce as of 7:20 a.m. ET.

Technical traders have located a confluence of support near the 38.2% Fibonacci retracement. Below that, prices are likely to find strong support at the 23.6% Fibonacci level, which coincides with $16.66 a troy ounce.

Silver is unlikely to make a return to the May 9 swing low near $16.00, a sign that prices will continue higher over the medium term. Momentum has clearly picked up once again on account of a weaker dollar and growing geopolitical risks – market forces that generally support precious metals.

Gold prices were trading lower through the morning session, with the June contract slipping $4.10, or 0.2%, to $1,251.40 a troy ounce.

The U.S. dollar index was little changed Wednesday after posting rare gains in the previous session. The index was last seen hovering at 97.37.

The greenback has posted sharp declines against the euro, pound, yen and Canadian dollar in recent weeks. However, the fundamental outlook on U.S. monetary policy remains largely intact.

The Federal Reserve will release the official transcript of the Mat 1-2 Federal Open Market Committee (FOMC) meeting at 2:00 p.m. ET. Policymakers voted against raising interest rates earlier this month. The odds of liftoff next month are more than 83%, according to the 30-day Fed Fund futures prices.

Source: EconomicCalendar