Silver continues to trade lower today below $17 as reports hitting the newswires suggest that the US and China may reach a compromise to delay the planned December 15 tariff hike.
A Wall Street Journal report has stated that negotiators on both sides were working out modalities to delay the planned tariff hike. This has sent risk-on flows into the markets, causing the safe haven metals to be offered in the market.
Further adding to the risk-on sentiment were statements from the White House acting chief of staff Mick Mulvaney, in which he described the process towards a Phase one US-China deal as “pretty good.” These comments were made at a Wall Street Journal event earlier Tuesday.
The XAGUSD pair is currently ticking lower on the risk-on sentiment brought on by the positive trade headlines. Price action had earlier broken below the 16.67 support (previous highs of July 24 and 25 as well as previous lows of November 12). However, a slight pullback to the broken support has been resisted, effectively turning this area into a resistance.
The breakdown move from the bearish flag consolidation area is expected to continue with a measured move to the 16.19 price level, where a previous double top had formed on Jan 31 and Feb 20. This is also the site of previous lows of July 22 and 31. If price is able to breach this area, then the next target could be 15.55, where the neckline of the aforementioned double top resides as well a cluster of highs in March as well as June 2019.
On the flip side, recovery of silver prices has to be accompanied by a push above the previous flag, and also above the 17.25 resistance formed by previous highs at August 7 and November 22. Above this level, 17.74 remains an upside target as was formed by previous cluster of highs in October 2019.
Silver prices will continue to be dominated by US-China headlines, heading into the new year.More content