Silver Breaks Through $17.00. What to Expect in 2020.
Silver prices are trading at $17.04, up 0.65% on the day.
That comes on the heels of the U.S. and China announced on Friday that a limited trade deal had been reached.
Yet, silver trails gold in terms of gains in 2019. While gold is almost up 15% in 2019. The 200 EMA is at 17.14, which is below resistance at 17.25. The 50-day EMA is 16.72.
Oftentimes, the silver price lags behind gold, but closely follows.
Despite that silver has not increased like gold, the so-called “poor man’s gold” still had a good year. Silver advanced 16.9%.
Silverbugs will want to keep an eye on the U.S.-China trade situation and global growth prospects. Standard Chartered precious metals analyst Suki Cooper.
“For silver, trade negotiations are one of the key risks. Given the impact, it has on industrial demand growth, economic growth, and outlook for the tech sector,”Suki Cooper told Kitco News. “We do expect the Federal Reserve to remain on hold in 2020, but there will likely be continued concerns around the U.S.-China trade negotiations… Given that there is still negative-yielding debt on a global basis, this is likely to create a positive backdrop for safe-haven assets.”
Brexit, too, will play a role in silver prices.
“For gold and silver, it is going to be the macro-environment that is a key driver,” she said. “We think the trade tensions will be the underlying theme for the complex as a whole, whether that’s going to impact industrial demand or auto sector growth. Or whether that triggers safe-haven interest in gold and silver.”
According to RJO Futures senior market strategist Philip Streible. The Dutch bank ABN AMRO projects silver to reach $18 an ounce by year-end after averaging $16.60 throughout 2020.
“We think that an aggressive sell-off in silver prices in the coming months will be an opportunity to position for higher prices later in 2020,” ABN AMRO senior FX and precious metals strategist Georgette Boele said. “Silver prices will probably be more supported if global growth and global trade start to stabilize and improve somewhat.”
TD Securities strategists believe silver could peak even higher. “Silver [could] jump to $20/oz by the end of 2020 in response to its firming fundamentals and spillover investment demand from the yellow metal,” the bank’s strategists told Kitco News.
TD Securities strategist Daniel Ghali added: “A lot of the drags on growth, such as print episodes of deleveraging in China, tightening in the U.S, all been flashed out. Going forward, we should see some improvement.”
Standard Chartered believes silver could average $17.50 in 2020. In Q2, it could reach a peak of $18.