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Kenny Fisher

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.

Fed Expected to Stay on Sidelines

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.

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Silver Technical Analysis

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.

XAG/USD 1-Day Chart
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