Silver prices continue their bullish trend from last week supported by positive economic data, weakness in US bonds and the dollar index.
Silver is currently trading at $28.10, sharply higher from last week’s low of $26.78. The dollar index is trading near 89.757, marginally lower from Thursday’s high of 90.57 while US 10-year bond yields dropped to 1.644 in the early hours of today’s trading from last week high of 1.707.
On the economic data front, US April housing starts fell -9.5% m/m to 1.569 million, against expectations of 1.704 million. Also, US April building permits rose +0.3% m/m to 1.760 million, against expectations of 1.770 million. In addition, Japan Q1 GDP fell -5.1% (q/q annualized), weaker than expectations of -4.5%.
ECB Governing Council member Villeroy de Galhau’s comments were dovish for ECB policy and likely to provide support to precious metals. He said:
"There’s no risk of a return of lasting inflation in the Eurozone, and so there's no doubt that the ECB's monetary policy will remain very accommodative for a long time."
According to the CFTC Commitments of Traders report for the week ended May 11, net long for silver futures increased by 4,976 contracts to 52,843 for the week. Speculative long position added by 7,539 contracts, while shorts were increased only by 2,563 contracts.
Silver prices are likely to trade firm while above the key support level of 20 days EMA of $26.96 and 50 days EMA of $26.52, it may face stiff resistance near $28.21 - $28.60