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Silver Slips to 3-Week Low as Downturn Continues

Silver prices continue to fall this week. The metal is currently at $17.80 and if risk appetite remains solid, the downturn could continue.
Kenny Fisher

Silver continues to lose ground this week. Currently, silver is trading at $17.80, down $0.15 or 0.89% on the day.

Silver Slipping as Risk Appetite Returns

December was all roses for silver, which jumped 4.9% on the month. The upswing continued into the New Year, after a U.S. drone attack killed an Iranian general and Iran retaliated with a missile attack on U.S. bases in Iraq. Tensions rose to a fever pitch in the Middle East, as fears rose that the U.S. and Iran could go to war. Investors flocked to safe assets, and silver prices climbed close to the lofty $19.00 level.

The spike in silver prices was all-too-brief, as it became apparent that both Iran and the U.S. were interested in stepping back from the brink. Investor risk appetite quickly recovered and safe-haven silver has fallen all the way to $17.80.

Investors Eye CPI, Retail Sales

The U.S. economy started the year 2020 in solid shape, but inflation remains below the Federal Reserve target of 2.0 percent. Consumer inflation has been losing ground and the downturn is expected to continue in December. CPI is forecast to slow to 0.2%, compared to 0.3% a month earlier. On Thursday, we’ll get a look at retail sales, the primary gauge of consumer spending. Retail sales are expected to improve to 0.3%, while core retail sales are projected to rise 0.5%. Any unexpected readings could affect risk apprehension and have an impact on silver prices.

Silver Technical Analysis

With the downtrend continuing, the key 18.00 level has switched to a resistance line. Above, there is resistance at 18.60, which is protecting the 19.00 line. On the downside, there is weak support at 17.50, where the 50-EMA line is also situated. If silver breaks through this line, the metal has room to fall as low as 17.00, which is the next support level.

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