Silver Sliding on Global Growth Fears

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Updated: Feb 27, 2020, 10:22 UTC

Silver continues to lose ground and is looking upwards at the$18.00 level. As the coronavirus continues to spread, the industrial demand for silver has weakened.

Silver Weekly Price Forecast - Silver Markets Rally Significantly

Silver is slightly lower on Wednesday, after plunging over 3.3% on Tuesday. Currently, silver is trading at $17.90, down $0.10 or 0.56% the day.

Silver Falls as Industrial Use Declines

After a strong run in which silver gained over 6 percent, the metal has reversed directions and coughed up most of those gains, falling close to 4 percent. Silver benefited from its position as a safe-haven asset, but the metal is also used as an industrial metal. One key industrial use is in photovoltaic (PV, which is a key component in the manufacture of solar panels. and China boasts the largest PV silver market in the world, and the coronavirus resulted in many PV factories having to close. The virus has also spread to South Korea, another industrial hub for silver.

Coronavirus Reaches Western Europe

It has been a dreadful week for crude, which has slumped 7.1 percent. Investor risk apprehension continues to rise as the coronavirus outbreak has spread to Western Europe. Italy has reported 11 fatalities, while France confirmed its second victim on Wednesday. Spain, Austria and Switzerland have also reported coronavirus cases. The European Union had considered imposing border controls but has decided that such a severe move would do little to contain the virus.

Silver Technical Analysis

Silver continues to lose ground this week. The pair tested the symbolic line of 18.00 on Tuesday and has dropped to a daily low of 17.79 in the Wednesday session. Below, the 50-day EMA is situated at 17.81 and is touching the candlesticks. The next support line is at 17.50. The 200-EMA is at 17.11, followed immediately by the round number of 17.00.

On the upside, 18.00 is an immediate resistance line. Above, we have resistance at 18.60, followed by 19.20.

About the Author

Kenny Fisherauthor

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.