Silver prices tumbled on Friday, not only erasing earlier gains from the week but wiping out gains from the prior three weeks. Ahead of the US election, there was a strong bid for precious metals as investors were seen primarily hedging exposure in the financial markets through metals. Silver prices showed some resiliency by holding near weekly highs after the election despite Gold prices promptly turning lower but inevitably dropped lower for a single day decline of 6.81% on Friday.
Friday’s decline has resulted in a notable technical break as a rising trendline as well as the 200-period daily moving average were breached to the downside. The rising trendline connects January lows with late March lows and had held prices higher throughout October. The drop below the 200 DMA has been the first time Silver has traded below the indicator since March.
The US Dollar index (DXY) posted net gains on the week despite declining sharply as election results initially started to come in. DXY reached a low of 95.89 referencing one-month lows but reversed sharply to close the day out higher. While upside momentum slowed in the second half of the week, the index closed five consecutive days in the green and has erased losses from the prior two weeks.
In the upcoming week, the latest inflation data will be released out of the United States and stands to impact Silver prices. The consumer price index will be reported on Friday and is expected to rise 0.4% in October, up from a rise of 0.3% in the prior month. The core CPI is expected to rise 0.2% against a rise of 0.1% in the prior reading. On Tuesday, the latest retail sales figures will be released out of the United States and also stand to cause volatility. Janet Yellen is scheduled to testify in front of the joint economic committee on Friday, her speech will shed some light on the Fed’s outlook following the election.
Source: Economic Calendar