Silver Price News: Silver Ticks Higher As Gold Posts Gain

Silver prices nudged higher on Tuesday, taking some direction from moderate gains for gold, as the markets braced for expected interest rate decisions by central banks in the US, Canada and EU.

Prices rose to an intraday high of $30.58 an ounce on Tuesday, compared with around $30.29 an ounce in late deals on Monday.

Eyes on central banks

Much of the focus in financial markets will be on central banks this week, with the US Fed expected to keep interest rates on hold on Wednesday, while the bank of Canada is expected to cut rates by 25 basis points. Then on Thursday it will be the ECB’s turn, with the market anticipating a similar cut of 25 basis points. Lower interest rates tend to support precious metals prices as they reduce the opportunity cost of holding non-yield-bearing assets.

Technical analysis

On the technical charts, silver faces downward-sloping oblique minor resistance at $30.65 an ounce. Should the price breach this area on the upside, the next indicative target level would be $31.98 an ounce. However, silver’s failure to punch through this near-term barrier suggests some appetite to move lower, and further tests of rising oblique major support at $29.95 an ounce look likely. The 10-day Relative Strength Index for silver remains in neutral territory at around 52 as of Tuesday.

Upcoming data/events

Beyond the aforementioned central bank interest rate decisions this week, Thursday will bring Q4 GDP growth rates for the US and Euro Area, for the latest pulse-check on major economies. Then on Friday, the markets will be watching out for the US Core PCE Price Index data for December, for an update on US inflation levels. Silver’s dual role as a precious metal and an industrial metal mean it can be sensitive to economic growth data in general, as a gauge of industrial demand.

Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.

Read our Editorial Guidelines here.