Silver has climbed to a 14-week high on Monday, as investors have snapped up safe-havens in response to the killing of an Iranian general by the United States. If tensions in the Middle East escalate, we could see the silver rally continue.
Silver has posted gains in Monday trade. Currently, silver is trading at $18.38, up $0.21 or 1.16% on the day. The metal touched $18.51 in the Asian session, its highest level since late September. This week’s highlights are U.S. nonfarm payrolls and wage growth for December, which will be released on Friday.
A U.S. airstrike killed a top Iranian general on Friday, sending shock waves across the Middle East. With tensions already at a high level, the U.S. strike, which killed Qassem Sulaimani, head of the Revolutionary Guards, has raised fears of an all-out war in the region. Iran has vowed revenge for the killing, but it will have to tread carefully with an unpredictable President Trump.
The markets have reacted on Monday, with safe-haven assets, such as gold and silver, recording gains. Silver is up over 1 percent on Monday, and gold touched $1589, its highest level since April 2013. Investors are clearly shaken, which means that silver and gold could continue to rack up gains this week as geopolitical tensions remain high.
In the U.S., the holiday schedule resulted in the release of the FOMC minutes on Friday. Policymakers said they expected rates to remain steady “for a time”, but did note continuing downside risks to the U.S. economy due to global trade tensions. ISM Manufacturing PMI slipped to 47.2 in December, down from 48.1 a month earlier. This was shy of the estimate of 49.0 and the weakest reading since June 2009.
The forecast for silver is positive. The round number of 18.00 has been a resilient resistance line since November, but silver has broken through and this line has switched to a support role. Below, we find support at 17.50, followed closely by the 50-EMA line at 17.42.
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.
