Silver prices paused last week’s fall, and was able to gain nearly 0.25% on Monday. The prices lost more than 4% over the past two sessions, as investors geared up for the latest US Federal Reserve policy decision this week.
Silver prices also came under pressure from persistent demand concerns in top consumer China.
Data showed that retail sales in China slowed more than expected in November, indicating weakening consumption.
China’s industrial output in November grew 5.4% from a year earlier, faster than the 5.3% pace seen in October, beating expectations for a 5.3% increase in a Reuters poll.
However, retail sales, a gauge of consumption, grew at its weakest pace in three months at 3.0% last month, much slower than a 4.8% rise seen in October. Analysts had predicted a 4.6% expansion.
New home prices in the country also declined for the 17th consecutive month in November amid a prolonged property downturn.
Meanwhile, the latest policy support promises from Beijing, including pledges of more proactive fiscal stimulus and looser monetary policy failed to excite investors amid the lack of details on the size of potential stimulus.
The US Fed monetary policy later on in the week will be the key driver for the metals prices. The Fed is widely expected to cut interest rates by 25 basis points on Wednesday, but traders scaled back expectations for further easing next year.
Technical Outlook – Silver Prices
Comex Silver prices dropped over 1% last week, retreating from a peak of $32.32 to settle at $30.54, down from the previous week’s close of $30.96.
On the chart, prices are hovering near a multi-day support level at $30.12. A break below this level could trigger a decline of 3%-4% in the coming week, with potential downside targets at $29.55-$28.80.
On the upside, resistance is seen at $31.42. A breakout above this level could lead to a short-term recovery toward $32.10-$32.58.
Until then, Happy Trading!
Commodity Samachar Securities
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