Nervous investors have responded by snapping up precious metals, with gold prices gaining 3.1% this week. In Friday’s Asian session, gold touched a daily high of 1636.59, its highest level since March 2013. The gold rally has dragged silver with it, as silver prices are at their highest since January 8.
The Federal Reserve minutes, released earlier this week, took note of the coronavirus outbreak. Policymakers highlighted the significant risk posed by the coronavirus, stating that “the threat of the coronavirus, in addition to its human toll, had emerged as a new risk to the global growth outlook, which participants agreed warranted close watching.” Policymakers also said that the outbreak has dampened investor sentiment. This warning from the Fed underscores the threat that coronavirus poses to the global economy, which will likely put upward pressure on silver prices until the outbreak is contained.
Silver Technical Analysis
This week’s silver rally distance has seen the metal put more distance between itself and the key 18.00 level. The resistance line of 18.60 is under strong pressure and could be tested on Friday. This would be a significant development, as this line was last tested in resistance in late September.
On the downside, we find support at the 18.00 line. Below, the 50-day EMA is currently situated at 17.79, followed by support at 17.50.