Silver Traders Await FOMC Comments on Wednesday
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iShares Silver Trust ETF (NYSE: SLV) is expected to open slightly higher on Tuesday, holding onto gains made early in the week. A significant move higher isn't expected today, as silver traders await the FOMC rate decision on Wednesday.
Comments from the Fed are expected to indicate further quantitative easing, and this could give silver a positive bias going into the middle of the week. Easy monetary policy supports commodity prices because it stokes inflation fears and drives investors into precious metals and other assets seen as inflation hedges.
The price of silver has dropped from a high of near $50/oz in April of last year and is trading at $28.77. $30 is the critical level for silver, and traders say that upside in the metal is unlikely unless the price can break through and hold this level. On the downside, $26/oz has provided support on multiple occasions over the last year. For now, silver is trading in a range between those two levels, and this has traders hoping for a catalyst. Depending on the Fed comments, it could come as early as tomorrow.
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Comments from the Fed are expected to indicate further quantitative easing, and this could give silver a positive bias going into the middle of the week. Easy monetary policy supports commodity prices because it stokes inflation fears and drives investors into precious metals and other assets seen as inflation hedges.
The price of silver has dropped from a high of near $50/oz in April of last year and is trading at $28.77. $30 is the critical level for silver, and traders say that upside in the metal is unlikely unless the price can break through and hold this level. On the downside, $26/oz has provided support on multiple occasions over the last year. For now, silver is trading in a range between those two levels, and this has traders hoping for a catalyst. Depending on the Fed comments, it could come as early as tomorrow.
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