Silver has steadied after a sharp decline on Thursday. Will the slide continue? Investors are hopeful that decisive action by the U.S, Congress and the Federal Reserve will ease the financial turmoil.
Silver is unchanged on Friday, after sustaining sharp losses a day earlier. Currently, silver is trading at $15.80, down $0.02 or 0.09% on the day.
Silver fell over 5 percent on Thursday and has plunged 9 percent this week. The decline on Thursday was in response to U.S. President Trump’s announcement of a ban on foreign travelers from Europe, with the exception of the UK. The ban is in effect for 30 days, and is in response to the coronavirus outbreak, which has now killed 33 people in the U.S. The move pushed silver to an 8-month low and also sent global stock markets sharply lower.
The market sell-off has eased on Friday, on hopes that help is on the way. U.S. lawmakers are working on an economic package to address the coronavirus crisis, which could be unveiled as early as Friday. Stephen Innes, global chief markets strategist at AxiCorp, noted that a bipartisan response is having a calming effect on the market, as it “suggests that there will be little obstacle to a more massive stimulus effort.”
The Federal Reserve has also mobilized. Analysts expect the Fed to cut rates again at next week’s policy meeting. Last week, the Fed stunned the markets and slashed rates by 50 basis points. As well, the New York Federal Reserve made a dramatic move on Thursday, as it said it would inject more than $1 trillion into the markets in the next few days.
For a second successive day, silver is testing support at the 15.60 line. Below, we find support at the round number of 15.00, followed by a support line at 14.20. On the upside, the line of 16.30 has some breathing room in resistance. Above, we have resistance at 16.90, followed by the 200-day EMA line situated at 17.08.
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.
