Yesterday was, once again, another negative day for silver, which continued lower for a fourth consecutive session, opening gapped down from Friday’s close before ending at $19.00 per ounce.

Much of  the trading session was dominated by the procession of talking heads from the FOMC, who continue to express their views ahead of the lock-down before the meeting. But it was dovish comments from Fed member Brainard that kept the US dollar (UUP, quote) contained, with US equities rising as a result.

Daily trading volumes for silver (SLV, quote) reflected the price action, with above average volume, and wick to the lower body signalling some buying and support on the daily chart. However, with the volume point of control firmly overhead in the $19.90 per ounce area, and with two resistance areas also weighing heavily at $20.70 per ounce, and $19.50 per ounce, the metal continues to struggle to find any traction higher. Below we have a well developed support platform in place at $18.52 per ounce, which defines the lower level of the current congestion phase, and one which has held during the testing phase of late August.

In the short term, much now depends on next week’s FOMC meeting and vote, and given the weak economic picture, and with the Fed funds futures increasingly suggesting a hold decision, this may provide some much needed upside momentum for commodities in general, and silver in particular. It was also interesting to note that last weeks Managed Net Longs for silver futures increased from 74,158 to 82,210 on Comex CME with an increase of Open Interest of 36%. This was also reflected in gold with an increase  from 238,152 to 278,944 for the Managed Net Longs and an increase of Open Interest of 34%.

Anna Coulling is a trader with over 16 years’ experience and founder of AnnaCoulling.com