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Kenny Fisher
Silver

Silver prices have edged higher on Friday, after sustaining considerable losses on Thursday. seen on Thursday. In the European session, silver is trading at $17.56, up $0.08, or 0.41% on the day.

Silver Dips After Soft U.S. Inflation

Silver prices dropped 1.2% on Thursday, marking the sharpest one-day in October. Investors reacted negatively as U.S. consumer inflation dipped in September and missed the forecasts. Headline CPI dropped to a flat 0.0%, only the second time this year that CPI has failed to post gains. There was no relief from Core CPI, which slowed to 0.1%, down from 0.3% a month earlier. With current inflation levels well below the Fed target of 2.0%, the FOMC can afford to maintain a dovish stance, as the markets gear up for yet another rate cut at the October 30th meeting.

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Will U.S. and China Reach a Mini-deal?

U.S. and Chinese negotiators resumed trade talks in Washington on Thursday, and the mood of the talks appears optimistic. One reason for the positive vibes is the fact that the talks are expected to focus on reaching a mini-trade deal, rather than a broadly comprehensive agreement which has proven elusive. The talks will likely focus on avoiding further tariffs which would exacerbate the bitter trade dispute between the world’s two largest economies. The U.S. has threatened to raise tariffs on $250 billion in Chinese goods from 25% to 30% next week, and further tariffs are scheduled for December. However, the sides are likely to steer away from the thorny issue of intellectual property. If the sides make progress in the current round of talks, investor risk appetite would climb, which could send silver prices lower.

Silver Technical Analysis

Silver has shown stronger movement this week, but remains range-bound. We have the 50-EMA level at 17.46 as support, with resistance at the round number of 18.00. Lower down, there is support at 16.90, with the 200-EMA providing support at 16.90.
XAG/USD 4-Hour Chart
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