Silver Price News: Silver Dips As Markets Watch US Election

Silver prices fell on Wednesday morning, as the markets kept an eye on the US election results.

Prices rose to an intraday high of $32.96 an ounce on Tuesday, compared with around $32.43 an ounce in late deals on Monday. Prices came back off their earlier highs to trade at $32.63 an ounce later in the session but fell further on Wednesday morning to as low as $31.52 an ounce.

Attention was focused on Tuesday’s US presidential election, which appeared to prompt a cautious attitude as the market awaited the outcome, along with Thursday’s US Fed meeting in which the central bank is widely expected to cut interest rates by a further 25 basis points. These risk factors may have combined to create a rather subdued atmosphere in the precious metals markets at the start of the week.

Technical analysis

From a technical perspective, silver prices were trading just below their 20-day moving average, which stood at $32.75 an ounce as of Tuesday. Should prices lose further ground, a degree of support may be encountered due to rising oblique major support at $31.94 an ounce, which is the lower boundary of a rising trend channel seen since early August.

A Fibonacci analysis based on the August to October bullish move for silver indicates potential further support at the 38.2% retracement level at $31.64 an ounce. The 14-day Relative Strength Index is considered neutral at 51.3 as of Tuesday, indicating that silver is neither overbought nor oversold. In addition, the more stable price performance since November 1^st may be a sign that silver has finished a short-term downtrend and is looking for new direction.

Upcoming data to watch out for

On the data side, Wednesday will see a speech by ECB President Christine Lagarde, for an update on monetary policy thinking in Europe’s central bank. Then later on Wednesday night, a meeting of China’s Standing Committee of the National People’s Congress will be watched for any potential economic stimulus measures. The committee jointly exercises the power to enact laws in China. Any boost to China’s economy would represent a bullish factor for industrial demand for silver. While China is one of the largest producers of silver, it also ranks among the largest consumers, alongside India, the US, UK, Canada, Germany and Japan.

Then on Thursday, attention will turn to the US Fed’s interest rate decision, which is widely expected to constitute a 25-basis point cut – generally seen as a bullish factor for non-interest-bearing assets like gold and silver.