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Silver Prices Steady After Dismal Week

Silver prices are calm on Monday, after sliding over 7 percent last week. Will the downturn continue?
Kenny Fisher
Silver daily chart, November 05, 2019

Silver has leveled off in Monday trade, after sustaining losses on Friday. In the European session, the metal is trading at $16.88, up $0.09 or 0.58% on the day.

Silver Looking up at 17.00 Level

Silver has pushed below the 17.00 level late last week, after this line had remained intact since October 1. On Friday, the metal touched a low of 16.67, its lowest level since mid-August.

 

Trade Talks Optimism Send Silver Reeling

Silver plunged 7.1% last week, as the metal suffered its worst week since October 2016. Precious metals are sharply lower, as investor risk appetite has climbed, sending equity markets higher. The catalyst for the optimism is renewed expectations that the U.S. and China are close to reaching an interim trade deal, known as “Phase 1”. This would allow the two countries to reach a limited trade agreement, while leaving the most intractable issues for another round of negotiations. On Wednesday, the Chinese commerce ministry announced that the two countries would phase out the trade war tariffs, but it did not provide a timetable for such a move. A new trade deal could significantly boost global trade, which has been damaged by the bitter trade war. If there are further signs that a deal is near, traders can expect silver prices to continue to head lower.

Silver Technical Analysis

Silver’s sharp slide last week has pushed the metal below the key support line of $17.00. This is a significant development, as the line has held since October 1. On the downside, we find support at 16.50, which last saw action in early August. On the upside, the 50-EMA, which is at 17.56, could act as a short-term resistance line. Higher up, there is resistance at 18.30.
XAGUSD 1-Day Chart
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