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Silver Poised for Strongest Week Since August

Kenny Fisher

Silver is almost unchanged in the Thursday session. Currently, silver is trading at $18.36, down $0.13 or 0.38% the day. 

Gold Rally Lifts Silver Prices

It has been an excellent week for silver, as the metal has gained an impressive 4.5% this week. This is shaping up to be silver’s strongest week since the last week in August, when silver jumped 5.3%.

The coronavirus, which shows no signs of being contained, continues to chill investor risk appetite. The outbreak has caused havoc in the Chinese economy, and this week’s warning from Apple that it would fall short of its revenue forecast due to the disruption of its Chinese production facilities. The disruption to supply-chains is also affecting other multinationals with operations in China.

Nervous investors have responded by snapping up precious metals, with gold prices gaining 3.1% this week. In Friday’s Asian session, gold touched a daily high of 1636.59, its highest level since March 2013. The gold rally has dragged silver with it, as silver prices are at their highest since January 8.

Fed Calls Coronavirus Global Risk

The Federal Reserve minutes, released earlier this week, took note of the coronavirus outbreak. Policymakers highlighted the significant risk posed by the coronavirus, stating that “the threat of the coronavirus, in addition to its human toll, had emerged as a new risk to the global growth outlook, which participants agreed warranted close watching.” Policymakers also said that the outbreak has dampened investor sentiment. This warning from the Fed underscores the threat that coronavirus poses to the global economy, which will likely put upward pressure on silver prices until the outbreak is contained.

Silver Technical Analysis

This week’s silver rally distance has seen the metal put more distance between itself and the key 18.00 level. The resistance line of 18.60 is under strong pressure and could be tested on Friday. This would be a significant development, as this line was last tested in resistance in late September.

On the downside, we find support at the 18.00 line. Below, the 50-day EMA is currently situated at 17.79, followed by support at 17.50.

This article was originally posted on FX Empire