Yahoo Finance Silver Claws Close to $17.00
Silver prices have posted small gains and are pressing on the $17.00 level. In the European session, silver is trading at $16.95, up 0.35% on the day. Silver has climbed 2.4% this week, erasing most of the losses sustained a week earlier.
Finally, a Trade Deal
There was a major breakthrough in the U.S.-China trade talks, which have seen their fair share of ups-and-downs. The two sides are reported to have agreed to a ‘Phase 1’ interim trade agreement in principle, which means that U.S. President Trump must give his approval to the deal. On December 15, the U.S. is scheduled to impose a new 15% tariff on some $160 billion on Chinese goods, and it remains unclear if this tariff will be suspended now that agreement is almost in place. Still, the news of a breakthrough is significant, and will likely raise risk appetite and weigh on silver and other safe-haven assets.
Silver Rises on Fed’s Dovish Stance
Silver has climbed 2.4% this week, erasing most of the losses sustained a week earlier. The metal posted strong gains on Wednesday, as the safe-haven asset took advantage of a dovish-sounding Federal Reserve. Fed Chair Jerome Powell said that the U.S. economy was performing well, despite difficulties in global economic conditions. Still, it was apparent that the Fed was in a dovish mood, as the “dot plot” of FOMC members’ future projections showed a pronounced downward shift compared to the previous meeting in September.
At the Wednesday meeting, 13 of the 17 FOMC members projected no change in current rate levels until 2021. Back in September, eight members saw no change, while nine members expected one or more increases in 2020. FOMC members maintained the GDP forecast of 2.2% for 2019, but lowered its inflation forecast for 2019 to 1.6%, compared to 1.8% in September.
Silver Technical Analysis
The silver price forecast remains neutral, as it is unclear which direction the pair will take next. The line of 16.90, which has been under attack since mid-November, is fluid. Above, the 200-EMA is at 17.14, just below resistance at 17.25. Silver may face an uphill battle moving much higher, given the resistance barriers just above the 17.00 level.
On the downside, the 50-EMA is at 16.58, just above support at 16.50. This major support level has remained intact since early August. A breakout below this line would be of major significance.
This article was originally posted on FX Empire
