Silver prices remain flat, as the metal is in a holding pattern ahead of the Federal Reserve rate decision at 19:00 GMT on Wedndesday.
Silver prices are almost unchanged for a second straight day. In the European session, silver is trading at $16.63, up $0.04 or 0.26% on the day.
After a sharp drop on Friday, silver has settled down this week. The metal fell 2.3% on Friday, after a robust nonfarm payrolls report raised risk appetite and sent safe-haven silver to lower ground. Silver touched a low of 16.51 on Friday, its lowest level in four months. In economic news, the U.S. releases consumer inflation reports for November. CPI is expected to dip to zero, after a gain of 0.2% in the previous release. The core reading is projected to remain steady at 0.2 percent.
Investors are keeping a close eye on the Federal Reserve, which will conclude its 2-day monthly policy meeting on Wednesday. It’s a virtual certainty that the Fed will maintain the current benchmark rate. The Fed has signaled a pause in rate cuts, and none are expected in the first quarter of 2020. This means that the upcoming rate statement and comments from senior Fed officials will carry great weight and could have a significant effect on the movement of precious metals, such as silver and gold. With the U.S. also releasing consumer inflation numbers ahead of the FOMC rate decision, we could see some stronger movement from silver on Wednesday.
With silver drifting this week, our technical breakdown remains in place. The line of 16.90 has switched to a resistance role, after silver broke below it on Friday. The 200-EMA is at 17.20, followed immediately by resistance at 17.25. On the downside, the 50-EMA line is touching the candlesticks at 16.56. This is followed by support at 16.50, which has held firm since August.
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.
