• Silver capped in a 50% mean reversion, focus is on a test of 22 the figure. 
  • Risk appetite improves yet silver pressured on tapering sentiment.

Silver is down on the session by some 0.30%, drifting from a high of $22.88 to a low of $22.49 despite a softer dollar and improved risk sentiment in broader financial markets.  

The markets have corrected the moves related to the prior session's Federal Reserve whereby the dot plot further reinforced the Fed's hawkish tone, with market pricing for Fed hikes. However, the US dollar has been sold off on Thursday as global stocks rally while worries about contagion from China Evergrande eased, aiding risk appetite.

Risk appetite supporting global stocks

MSCI's gauge of stocks across the globe charged higher by1.06%. As it gained for a third session, the index had recovered all its losses from Monday, when it posted its biggest percentage drop in two months. The pan-European STOXX 600 index.STOXX rose 0.93%. By 18.30 GMT, on Wall Street, the Dow Jones Industrial Average rose 581 points or 1.70%, the S&P 500  gained 64 points or 1.47% and the Nasdaq Composite added 166 points, or 1.10%.

With regards to the Fed, analysts at TD Securities explained that pricing for a terminal rate of 1.5%, rather than the Fed's 2.5%, suggests the divide is further on the horizon. ''This leaves financial conditions uber-easy for months to come, supporting risk assets. However, flow effects of tapering should still have some bite, particularly for silver, as slowing money supply growth dents the demand for all collectibles, including the retail appetite for bullion that has supported the white metal this year.''

Silver technical analysis

The long term support is under pressure which, if broken, would open the prospects of a downside continuation to the 21 figure in the near term.

currently, the price is testing old support in a 50% mean reversion which could cap the correction and see the 22.00 level pressured in coming days. 

 

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