Silver has reversed directions on Tuesday and headed higher. In the European session, silver is trading at $17.02, up $0.13 or 0.81% on the day. There are no major U.S. events on the schedule. On Wednesday, we’ll get a look at key services and employment data. The ISM Services PMI is projected to tick lower to 54.5, while ADP nonfarm payrolls is expected to improve to 140 thousand.
Have Trade Talks Hit a Bump?
There is a renewed concern that the trade talks between the U.S. and China may be stalled, due to new tensions between the two countries. Last month, the U.S. Senate passed legislation in support of pro-democracy supporters in Hong Kong, a move that infuriated the Chinese government. China has refrained from direct retaliation until now, but that could be about to change. On Tuesday, Chinese media reported that the government was preparing a list of “unreliable entities”, which could be a broad hint that some U.S. companies will face sanctions.
This move by China could also be a response to a proposed bill in the U.S. Senate which will sanction Chinese officials accused of human rights violations against the minority Uighur Muslims in western China. If there are further indications that the trade talks are on hold, we can expect safe-haven assets such as silver to continue to move upwards.
Silver Technical Analysis
The silver price forecast remains neutral, as the metal continues to show limited movement in both directions. Note that the 200-EMA and 50-EMA lines remain relevant. With the gains seen on Tuesday, the resistance line at 17.25 is under pressure. The 50-EMA is at 17.26. Above, there is resistance at 17.75. On the downside, the 200-EMA is at 16.55, a shade above support at 16.50. Below, there is support at the round number of 16.00, a level with psychological significance.
