Silver has reversed directions on Tuesday and posted slight losses. Currently, silver is trading at $18.34, down $0.28 or 1.56% the day.
Silver Rally Fizzles Out
Silver has been on an excellent run, climbing 6 percent since February 12. However, the rally has stopped on Tuesday, as silver prices are down 1.5 percent. Silver appears to have been overbought, as investors were only too happy to get their hands on precious metals, such as gold and silver. These safe-haven assets have benefited from growing alarm over the coronavirus, which has sapped risk appetite. This trend was clearly apparent on Monday. Silver touched a daily high of 18.90, its highest level since September 2, while gold prices touched a daily high of 1689.38, its highest level since 2013. Despite the pullback in silver on Tuesday, the trend for silver remains upwards, and I expect a rebound sometime during the week.
Italy Reports Coronavirus Deaths
Investors remain jittery over the coronavirus, which now has an official name – COVID-2019. The virus has now reached western Europe, with Italy confirming two fatalities from the outbreak. This will likely mean more confirmed cases in western Europe since they are no border controls within the European Union. With no signs that the virus will be contained anytime soon, we could see the silver and gold rallies continue this week.
Silver Technical Analysis
After an impressive rally, silver has retraced and is again putting pressure on the symbolic 18.00 level. Below, the 50-day EMA is currently situated at 17.84, followed by support at 17.50. Next is the 200-EMA, at 17.11.
On the upside, 18.60 is an immediate resistance line, followed by 19.20. Above, the lofty level of 20.00 has held in resistance since September 2016.
This article was originally posted on FX Empire
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