Silver Price News: Silver Rebounds from Two-Month Low

Silver prices briefly spiked higher to a one-week high on Tuesday, lifted by strengthening gold prices, although prices drifted later in the session to pare the day-on-day gains.

Prices hit an intraday high of $31.64 an ounce on Tuesday, up from around $31.20 an ounce in late trades on Monday.

Silver’s initial strength came as gold prices rebounded from a two-month low on Tuesday, lifted by a weaker US dollar and safe haven interest as the markets were spooked by Ukraine’s use of US-supplied longer-range missiles against targets in Russia. However, silver gave up the earlier gains to trade at just above $31.30 an ounce later on Tuesday afternoon.

Prices fall back from 12-year high

Silver prices hit a 12-year high in late October, but have since lost ground, falling to their lowest for two months as markets scaled back bets on upcoming interest rate cuts by the major economy central banks. Nevertheless, the markets are pricing in a roughly 60% probability of a 25-basis-point cut by the US Fed in mid-December.

Technical analysis

On the technical charts, silver’s action on Tuesday shows that the price has moved back up above rising oblique minor support at $30.76 an ounce and is still some way below its 20-day moving average at $32.13 an ounce. In addition, a Fibonacci analysis of the August-to-October bullish move for silver points to support at the 50% retracement level at $30.69 an ounce. Meanwhile, the 10-day Relative Strength Index gives a neutral reading at 46.49 as of Tuesday.

Upcoming events

Looking ahead, eyes will be on Wednesday’s expected speech by ECB President Christine Lagarde for the latest take on the health of the EU economy. Beyond that, Thursday will see UK CBI industrial trends orders for November, followed by US weekly initial jobless claims figures. But of greater impact will be Friday’s release of November manufacturing figures from several major economies including Japan, India, the Euro Area, the UK and the US. Silver’s dual role as a precious and industrial metal makes it sensitive to economic growth in general, and manufacturing demand in particular.