Silver Daily Forecast – Silver Crashes to 7-Month Low

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Updated: Mar 3, 2020, 15:46 GMT+00:00

Silver sustained one of its worst weeks in recent memory, falling 10 percent. Investors remain concerned that industrial demand for silver has chilled due to the economic turmoil caused by the coronavirus outbreak.

Silver is struggling after suffering huge losses in the Friday session. Currently, silver is trading at $16.72, up $0.10 or 0.66% the day.

Silver Plunges on Demand Jitters

It was a dismal week for silver, as the metal plunged a staggering 10%. The metal sagged 6.5% on Friday and touched a low of 16.39, its lowest level since August. Silver is used extensively as an industrial metal and the economic turmoil caused by coronavirus has dampened demand for silver. This is a similar situation to crude, which has fallen to a 13-month low due to demand concerns. Silver is also considered a safe-haven asset but nevertheless was down sharply last week. Interestingly, gold, which is also a safe-haven asset, lost ground last week, even though risk apprehension remains very high due to the coronavirus outbreak.

Will Fed Trim Rates in Response to Corona?

Only a few weeks, ago, Federal Reserve policymakers were confidently indicating to the markets that they did not anticipate lowering rates in 2020. However, the devastating economic consequences of the coronavirus may cause the Fed to reconsider this stance.

On Thursday, Chicago Fed President Charles Evans said that the Federal Reserve was paying “close attention” to the outbreak and said that “policymakers must commit to provide extraordinary accommodation in order to meet their mandate.” If the coronavirus spreads in the U.S., the Fed may be forced to cut interest rates.

Silver Technical Analysis

As silver falls, support levels continues to break. There is immediate resistance at 16.90, followed by the 200-day EMA at 17.11. Above, there is a resistance line at 17.50, followed closely by the 50-day EMA line is situated at 17.74. On the downside, we find support at 16.30. The next support level is at 15.50.

About the Author

Kenny Fisherauthor

Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.