Silver Takes Breather After Strong Gains

By:

Updated: Sep 24, 2019, 12:33 UTC

Silver came out of the gates hard on Monday, and punched past stubborn resistance at $18. There is growing speculation that the lofty $20 level could be next, but this line will likely be a tough nut to crack

Silver Takes Breather After Strong Gains

Silver Climbs Past 18.00 Level

Silver has posted small losses, after starting the week with strong gains. In the European session on Tuesday, the metal is trading at $18.53, down $0.05, or 0.36% on the day.

Silver gained 3.0% last week and has already produced identical gains this week as well. Will the upward trend continue? Many analysts are confident that silver could hit 20.00, a psychologically significant level, which was last reached in mid-August. However, I would expect the road to $20 to be bumpy for silver, as this line has not seen activity since September 2016.

U.S. GDP Could Cause Volatility

It’s been quiet on the fundamental front, but that will change late in the week. The U.S. releases third-estimate GDP on Thursday. The U.S. economy lost some steam in the second quarter, allowing the Fed to lower interest rates for the second time in two months. The second estimate for GDP came in at 2.0%, and analysts are expecting this growth rate to be confirmed for a third time. There’s more to come after GDP, with the release of durable goods orders and consumer sentiment on Friday. Investors have been treating silver as a safe-haven asset, and it will be interesting to see if the same holds true for these upcoming key events. If the answer is affirmative, I would expect some stronger movement from the silver later in the week.

Silver Technical Analysis

There has been some sustained upward movement by silver this week. The metal punched above the 18.00 level on Monday and has put some distance between itself and this line. The upward momentum on Monday continued as silver tested resistance at 18.60. I expect this line to remain under pressure and could be tested in the Tuesday session. An upward trend line which started on Friday continued in the Monday session, but silver has leveled off on Tuesday.

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.