Silver Steady as US, ECB Announce Stimulus
Investors have taken a break from the frenzied selling, as the equity markets in Europe and the U.S. have steadied on Thursday. This respite has also been reflected in silver prices, as silver is in green territory on Thursday. Silver has not enjoyed a winning daily session since March 5, so another winning session would certainly be a psychological boost.
Late Wednesday, President Trump signed into law a massive stimulus package that had been quickly approved by Congress. The package, worth close to a trillion dollars includes direct payments, deferred payments and tax breaks. The move is aimed at shoring up the U.S. economy, which analysts fear could be headed towards a recession. Unemployment claims skyrocketed to 281 thousand last week, up from 211 thousand a week earlier. These numbers are expected to climb sharply in the coming weeks, with some experts projecting up to a million unemployed persons.
The ECB has also taken dramatic action, after an initially tepid response to the CORVID-19 outbreak triggered heavy criticism against ECB President Christine Legarde. On Wednesday, the ECB announced a 750 billion euro asset purchase program to combat the financial turmoil caused by COVID-19. The program, called the Pandemic Emergency Purchase Program (PEPP) will last until the end of 2020.
Silver Technical Analysis
The 12.00 level remains crucial, as silver continues to hug this line. Currently, this line is an immediate resistance line. Above, there is resistance at 13.00. If that level is broken, the market will next be looking at 15.00. On the downside, if silver drops below Wednesday’s low (11.77), we could be headed much lower, as the next major support level is at the 10.00 level, which has psychological significance.