Silver has recorded small losses in Tuesday trade. In the European session, the metal is trading at $16.78, down $0.05 or 0.32% on the day.
Silver Dips to 3-Month Low
Silver prices remain under pressure and continue to lose ground. The metal dropped to 16.66 on Monday, its lowest level since August 12. Silver is recovering from a dismal week, which saw sharp losses of some 7.1 percent. Risk apprehension has dropped, on renewed optimism that the U.S. and China could be near a trade agreement, which would end the bitter trade war between the world’s two largest economies. This has reduced the attractiveness of precious metals, which act as safe-haven assets. The huge tariffs which each side has imposed continue to take a toll on the Chinese economy and have dampened the global economic picture as well. If reports of substantial progress in the talks are true, risk appetite would likely continue to climb, which would weigh on safe-haven assets such as silver.
Unrest in Hong Kong Escalates
The civil unrest has worsened in Hong Kong, with violent demonstrations on a daily basis. The Asian stock markets are uneasy and if the unrest continues, we could see stronger demand for silver. If the violence continues, there is a danger that China will respond more forcefully and send in troops to suppress the daily demonstrations.
Silver Technical Analysis
Silver continues to head lower this week, after breaking through the key 17.00 level late last week. On the downside, 16.50 is an immediate support level. This line saw action in early August. The metal is trading just above the 200-EMA. This is followed by support at the round number of 16.00. On the upside, the 50-EMA, which is at 17.54, continues to act as a short-term resistance line. Higher up, there is resistance at 18.30. .
This article was originally posted on FX Empire
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