Silver – Soft September After Super Summer

Silver has retraced in September after coming close to the key 20-level. The metal is mimicking gold and acting as a safe-haven asset, so traders should treat fundamental releases as market-movers.
Kenny Fisher
Silver daily chart, September 10, 2019

Silver Acting as Safe-Haven Asset

It was a sweet, sweet summer for silver, which rocketed 19.6% higher. What goes up must eventually come down, however, and this rule certainly rings true when it comes to currency movement and profit-taking. XAG/USD has declined by 2.70% in September.

This retracement should not be all that surprising, keeping in mind that it has been relatively minor in comparison to the huge gains we saw in July and August.  In the Tuesday session, silver is trading a shade under the 18-level, at 17.93.

Of interest to investors and traders is the fact that silver is acting as a safe-haven asset, much like gold, which also jumped higher in the summer months. Both commodities have benefited from escalating trade tensions between the U.S. and China, as well as the dovish stance of major central banks worldwide, especially the Federal Reserve.

If investors continue to treat silver as a safety net, then key fundamentals such as inflation, GDP and job numbers could have a significant impact on the direction of XAG/USD. As well, interest rate policy could move the metal, so if investors feel that more rate cuts are on the way, silver prices could move higher.

XAG/USD 4-Hour Chart

The pair started the week on a sour note, dropping 1.2% on Monday. It was just last week that silver punched above 19.50, and there was growing talk of a rally past the symbolic 20-level.

However, traders should keep in mind that the 20-level has proven a tough nut to break – it was last tested in September 2016. I would temper any over-enthusiasm for silver, as I expect the metal to hover between 18-18.60 during the week. Of course, a major geopolitical event or unexpected key U.S. economic report could change things, but absent any of these shocks, I would be surprised to see sharp volatility from the metal.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US