Silver Price News: Silver Sidles Higher on Better European Data

Silver has traded with a mild positive bias this week despite the absence of significant market catalysts. 

At the margin, fundamental support has improved somewhat, with both August Eurozone Industrial Production and the October Eurozone ZEW Economic Sentiment Index proving better than expected yesterday. 

ECB rate cut and press conference

Looking forward, while a rate cut from the European Central Bank on Thursday is very much discounted in the market, the subsequent press conference may give further guidance on future, silver-supportive, rate cuts. In the meantime, silver starts Wednesday trading around $31.7/toz.

China’s reflation strategy and impact on silver

However, a resolution of China’s reflation strategy remains a significant gap in the global reflation story, and support for silver industrial demand. It seems clear from the recent performance of the domestic stock market that investors are losing patience, though Friday’s China Q3 GDP data release might prompt much-needed clarity on policy going forward.

Silver technical analysis and key levels

Technically, silver has oscillated around its 20-day Simple Moving Average in recent sessions, and this currently lies at $31.4/toz. To the immediate upside lies resistance at the 23.61% Fibonacci retracement of the of the 9 September-4 October uptrend at $31.72/toz, while proximate support is provided by the 38.2% Fibonacci retracement at $30.95/toz. Further support is seen at $30.36/toz (major descending oblique), $29.71/toz (61.8% Fibonacci retracement), $29.58/toz (major ascending oblique) and $28.40/toz (major descending oblique).

To the upside, major horizontal resistance remains at $32.06/toz and a sustained move above this level is required to reveal an initial breakout target at the 23.61% Fibonacci extension level of $34.20/toz. However, we note that momentum, although improving, remains quite weak and additional ascending oblique resistance is currently present at $32.59/toz.

Upcoming economic data to watch

Data for silver investors includes today’s August Japan Machinery Orders and both September US Industrial Production data and the ECB-post rate decision press conference on Thursday.