Silver Price News: Silver Ticks Higher After Sharp Fall

Silver prices made modest gains of around 0.8% on Tuesday, showing signs of stabilising after a more pronounced fall on Monday.

Prices moved in a range of around $30.07 to $30.73 an ounce on Tuesday, compared with a fall from as high as $31.40 an ounce on Monday.

Silver’s action largely mirrored activity in the gold markets at the start of the week, which similarly showed a sharp fall on Monday and a steadier market on Tuesday.

Safe haven appeal takes dip

The precious metals markets came under downward pressure at the start of the week as the financial markets appeared to go into ‘risk on’ mode, lifting stock markets and undermining support for safe-havens. Efforts to broker peace in the Middle East have temporarily taken the edge off investor interest in precious metals as safe havens.

Technical analysis

Silver’s slump on Monday has once again seen the grey metal test levels close to the psychological $30.00 an ounce mark. On the technical charts, silver is also testing rising oblique major support at $30.10 an ounce as of Tuesday. A rebound off this level could clear the way for a price recovery, while any convincing downside break below this trend line could leave silver exposed to further losses in the short-term.

Upcoming events

The markets will be watching out for a flurry of US economic data releases on Wednesday, including the monthly PCE price index figures and durable goods orders, GDP growth for Q3, and weekly initial jobless claims figures. Traders will be watching out for any signs that could impact upcoming monetary policy changes. The markets are currently indicating a greater than 60% probability of a 25-basis point cut to interest rates by the US Fed at its next meeting on December 18^th. Lower interest rates tend to support non-interest-bearing assets like gold and silver.

Looking further out, Thursday night will see Japanese industrial production figures, for another signal on industrial demand for silver, which makes up roughly half of total demand for the metal. Then Friday will see an update on Euro Area inflation figures for November, as the markets assess the prospects of further interest rate cuts by the ECB.