Silver Dips, but China Fears Remain
Silver has started the new trading week with losses. Currently, silver is trading at $17.77, down $0.23 or 1.37% on the day.
Silver Hits Wall at $18.00
Silver continues to keep investors guessing as to where it is headed. After sharp losses last week, the metal rebounded late in the week, gaining close to 3 percent and pushing across the 18.00 level, which as psychological significance. However, this line continues to prove resilient, and is back in a resistance role on Monday. Silver is clearly comfortable around the 18.00 level, and I expect this line to remain relevant during the week.
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Coronavirus Disrupts China Economy
The China coronavirus continues to weigh on global markets. The outbreak has killed over 200 people in China and there are over 8,000 confirmed cases. A large number of countries have banned Chinese citizens from entering their borders and many airlines have stopped flights to China. Chinese officials have ordered two-thirds of Chinese businesses to remain closed until at least next week. Chinese financial markets were closed last week for the New Year, and things got nasty when the markets reopened for business on Monday. China’s stock markets have plunged 9 percent on Monday, while the yuan has fallen over 1 percent. If the outbreak worsens, the financial carnage could continue this week and the market jitters could lift safe havens such as silver and gold.
Silver Technical Analysis
Silver remains choppy and is having difficulty finding its footing. The 18.00 level has been sorely tested but has proven to be resilient. There is further resistance at 18.60 and at 19.00. On the downside, the 200-EMA is at 17.65, followed by support at 17.50. Next, there is support at the round number of 17.00.