Silver continues to lose ground in Friday trade, after sustaining sharp losses on Thursday. In the European session, the metal is trading at $16.97, down $0.13 or 0.81% on the day.
Silver Breaks Below $17.00
Silver fell by almost 3.0% on Thursday, marking the sharpest one-day decline since September 30. The pair dropped below the 17.00 level for the first time since October 1, and the metal is currently trading at 16.98.
Trade Talks Optimism Send Silver Reeling
Silver has plunged 6.2% this week, as the metal is headed towards its worst week since October 2016. Precious metals are sharply lower, as investor risk appetite has climbed, sending equity markets higher. The catalyst for the optimism is renewed expectations that the U.S. and China are close to reaching an interim trade deal, known as “Phase 1”. This would allow the two countries to reach a limited trade agreement, while leaving the most intractable issues for another round of negotiations. On Wednesday, the Chinese commerce ministry announced that the two countries would phase out the trade war tariffs, but it did not provide a timetable for such a move. A new trade deal could significantly boost global trade, which has been damaged by the bitter trade war. If there are further signs that a deal is near, traders can expect silver prices to continue to head lower.
Silver Technical Analysis
Silver’s sharp slide this week has pushed the metal below the key support line of $17.00. This is a significant development, as the line has held since October 1. On the downside, we find support at 16.50, which last saw action in early August. On the upside, the 50-EMA, which is at 17.56, could act as a short-term resistance line. Higher up, there is resistance at 18.30.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Bitcoin Cash – ABC, Litecoin and Ripple Daily Analysis – 08/11/19
- Wait… Was That a Bullish Silver Reversal?
- Asian Shares Weaken as Tariff Rollback Optimism Softens
- GBP/USD Daily Forecast – British Pound Hovers Near Three-Week Lows Post BoE
- USD/JPY Fundamental Daily Forecast – Rising Yields Exerting Upside Pressure
- GBP/USD, EUR/GBP, USD/CAD – Limited Movement Ahead of Weekend