A CRUCIAL Week For Silver

Silver in particular has a crucial week of trading ahead due in large part to the head and shoulders pattern the bullion banks have painted onto the weekly chart by capping silver prices over the past 10 days, combined with March expiration.
If they are successful, momentum traders and algos will pile onto the paper short side, targeting sub $14/oz silver.
If they are not and silver is able to break away towards $18.50, the very real potential for a short squeeze exists…

 

Gold and silver prices have been kept in a tight range this past week, with silver prices trading at $18 an ounce, and gold prices trading in a tight range between $1230 and $1245 an ounce.

Silver in particular stubbornly refuses to stay down, absorbing every raid the bullion banks have thrown at it the past few days attempting to cap silver under the 200 day moving average at $17.93, and paint a large head and shoulders pattern on silver’s weekly chart.

Much to the chagrin of the bullion banks and their nearly 50,000 new silver shorts however, silver has absorbed every punch thrown, and keeps bobbing back up.

Both metals rose sharply this afternoon with the 2pm release of the Fed Minutes, which as the market expected, prepared the market for the first interest rate hike of 2017 to be announced as soon as the March FOMC meeting.
In particular, the minutes stated:

…MANY FED OFFICIALS SAW HIKE `FAIRLY SOON’ IF ECONOMY ON TRACK.

In response the the market now sees a 38% chance of a rate hike in March, and June now at 78.4%.

Back to the metals complex, silver in particular has a crucial week of trading ahead of it due in large part to the head and shoulders pattern the bullion banks have painted onto the weekly chart by capping silver prices over the past 10 days, combined with March expiration.

 

Courtesy Craig Hemke

If they are successful, momentum traders and algos will pile onto the paper short side, targeting sub $14/oz silver. If they are not and silver is able to break away towards $18.50, the very real potential for a short squeeze exists.

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