The rout continues for silver, which has plunged 15 percent for a second straight day. The metal is struggling to stay above the $12 level, as the financial turmoil continues on world markets.
Silver has plunged in the Monday session. Currently, silver is trading at $12.29, down $2.40 or 16.40% on the day.
Silver fell 15.1% percent last week and the slide has continued on Monday, as the metal is down another 15 percent. The ‘dash for cash’ attitude which has gripped the markets has left all asset classes vulnerable. Gold, which is a traditional safe-haven asset, has not been spared, as the metal fell 8.6% last week and is down another 4.4% on Monday.
The free-fall in the markets has continued, despite drastic action by the Federal Reserve. The Fed cut rates by 50 basis points on Sunday, lowering the baseline rate to a range between zero and 0.25%. The Fed has now slashed rates by a full percent in less than two weeks. The dramatic move on Sunday was made in coordination with other central banks, which also lowered their interest rates to 0.25%. As well, the Federal Reserve announced that it is purchasing $700 billion in bonds and securities. The aim of these moves is to boost economic growth and also calm the frantic financial markets.
The coronavirus has been declared a national emergency in the U.S., as the country has taken drastic measures to curb the spread of the virus. Fears are growing that the outbreak will lead to a global recession, and the mood among investors remains grim.
Silver easily broke below support levels at 14.50 and 14.00 and has tested the 12.00 level on Monday. The next support level is at 10.50, which is protecting the 10.00 level, which has psychological significance.
Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.
