Silver has posted gains in Friday trade, adding to the slight gains seen on Thursday. In the European session, the metal is trading at $17.90, up $0.11, or 0.69% on the day.
Safety Status Boosts Silver
After posting back-to-back weekly losses, silver has rebounded nicely and is currently up 2.7% on the week. Investors have been treating silver as a safe-haven asset, much like gold. This was evident at the start of the week, when investor risk appetite plunged after a Saudi oil refinery was attacked and damaged, disrupting oil production.
Silver also provided a snapshot of investor mood after the keenly-anticipated Federal Reserve decision on Wednesday. The Fed cut rates for the second straight time, but investors showed a muted reaction, as the currency and commodity markets remained steady. There were two reasons why investors were calm after the rate cut. First, the cut was largely priced in, so the move was not a surprise. Second, the Fed delivered a “hawkish rate cut”, as Fed Chair Jerome Powell sounded positive about the U.S. economy, saying that the economic outlook was “favorable” and the rate cut was intended to provide “insurance against ongoing risks”. Despite the positive message, traders should keep in mind that the Fed has left the door open to further cuts before the end of the year if economic conditions deteriorate.
On Friday, silver has posted gains and is knocking on the doorstep of the 18.00 level. Silver has tested this line during the week, but it remains resilient. The metal could break above 18.00 on Friday, but I expect this line to remain relevant early in the week. Above, there is major resistance at 18.50. If silver can rally past this level, we could see the metal make an upward push towards 20.00, a psychologically significant level. On the downside, there is immediate support at 17.50. This is followed by support at 17.00, which has held since August 23.
This article was originally posted on FX Empire
More From FXEMPIRE:
- E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Trading on Bullish Side of 7883.25 Pivot
- AUD/USD Forex Technical Analysis – Counter-Trend Bounce Following Test of .6791 to .6767 Retracement Zone
- U.S. Crude Leaves Volatility Behind After Tumultuous Week
- GBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast
- Silver Gains Ground, Will Pesky 18.00 Level Fall?
- Price of Gold Fundamental Daily Forecast – Rangebound as Traders Try to Figure Out Fed’s Next Move