Silver Price News: Silver Ends Week on Back Foot

Silver prices fell further on Friday, ending the week on a bearish note, and adding to sharp losses seen on Thursday.

Prices fell as low as $32.52 an ounce by early Friday evening, down from an intraday high of $33.16 an ounce. That compares with around $32.69 an ounce in late trades on Thursday.

Gold leads silver lower as markets mull economic data

Silver’s downward move at the end of the week largely tracked the gold price lower, with the yellow metal falling sharply on Thursday from a new all-time high of $2,792 an ounce on Wednesday. The precious metals markets were left mulling a mixed set of US economic data released Friday which showed an unusually low number of non-farm jobs added in October, while unemployment figures for the same month came out in line with market expectations.

Silver’s losses at the end of last week have raised interest in whether this could be the beginning of a downward trend for the grey metal or simply a pause for breath before resuming its recent bullish trajectory.

Technical analysis

On the technical charts, silver’s bullish few days from October 18-29 pushed the metal’s price up through rising oblique minor resistance (at $33.13 an ounce on October 18 and $33.64 an ounce by October 29). However, the more recent pullback has seen silver fall sharply below this trend line, with the market now moving just below the 20-day moving average at $32.61 an ounce as of Friday. Should support here fail in a more convincing way, the next downside target would be rising oblique minor support at $31.43 an ounce.

With silver prices having shown a peak in October, a Fibonacci analysis can be applied from the early August lows to the October 22 peak, to provide a framework for further potential support levels during any price retracement. This analysis indicates that a 38.2% retracement would yield a support point at $31.64 an ounce, followed by a 50% retracement at $30.69 an ounce.

Upcoming events to keep an eye on

The market will be watching out for Monday’s European manufacturing PMI data for October, followed by US factory orders for September, for a handle on industrial demand for silver in the western economies. Then attention will turn to Tuesday’s US Presidential election as the markets try to gauge the impact of various policy stances on the financial markets. Outside of the political arena, the markets are pricing in successive interest rate cuts in the coming months, which continue to offer a supportive element for non-yield-bearing assets such as precious metals.