After an impressive technical breakout and the rally of silver futures into fresh 13-year highs, traders opted to capitalize on the overextension by taking profits and await for further information.
The Federal Reserve’s decision to keep policy rates intact earlier this week, noting the prolongment of its longstanding cautious and data dependent approach, due to the expected hit on prices from Trump’s inflationary tariff policies, dampened the appeal of both gold and silver.
The fact that the recent flare up of tensions between Israel and Iran did not supercharge safe haven flows into either gold or silver is a paradoxical development, yet reading about the recent discovery in Argentina, traders may see why.
Earlier this month, a landmark discovery was made in the Argentinian Andes, that could drastically shift the supply dynamics in the foreseeable future. Geologists identified, possibly the largest deposit of gold, silver and copper that has been found globally in the span of the past three decades. Estimates vary but this deposit contains more than 80 million ounces of gold and silver combined and over 12 million ounces of copper. This discovery alone could propel Argentina to one of the most prominent metal suppliers in the world, rivaling the mining powerhouse nations nearby, namely Chile and Peru.
Given this announcement and the prospect for greater supply provisions from Argentina, both precious metal’s prices will possibly add a negative tilt and press lower their respective prices in the foreseeable future.
Technical Analysis
Silver Chart – Profit taking activity rises, dragging silver futures closer to the $36 per ounce level
Resistance: 37.30 (R1), 38.50 (R2), 39.70 (R3)
Support: 35.50 (S1), 34.50 (S2), 32.80 (S3)
