Silver continues to lose ground on Wednesday, after strong losses on Tuesday. In the European session, the metal is trading at $17.40, down $0.13 or 0.76% on the day.
Silver Slips as Stock Markets Climb
Precious metals were down significantly on Tuesday, as global stock markets continue to point higher. Investor risk appetite remains solid, which has put downward pressure on precious metals, such as gold and silver prices. There is renewed optimism that the U.S. and China are close to reaching a limited trade deal (“Phase 1”), which could end the bitter trade war and provide a major boost to the global economy.
Services PMI Beats Estimate
The U.S. Nonfarm Manufacturing PMI accelerated to 54.7 In October, up from 52.6 in the previous release. This beat the forecast of 53.5. The services sector continues to show expansion, and the solid employment numbers seen on Friday reiterated that the industry is performing well. This has contributed to economic growth at a time when the U.S. manufacturing sector is struggling and has contributed to stronger risk appetite.
Silver Technical Analysis
Silver has tended to show limited movement in recent weeks, so a significant drop on Tuesday is certainly significant. The metal declined by 2.5% on Tuesday, its sharpest drop since late September. Significantly, the metal broke below the 50-EMA line and continues to test the trend line on Wednesday. This points to some fluidity, but it’s too early to determine if the uptrend trend is over. On the downside, there is support at 17.46, which was a key line throughout much of October. Below, we find support at 16.90. On the upside, the round number of 18.00 is an immediate resistance line. Higher, 18.70 is protecting the 19.00 level.
This article was originally posted on FX Empire
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