Silver extended downside movement on Friday, dragging the price of white metal to less than $17.00 following the release of some key economic news from Australia. The technical bias remains bearish because of a lower low in the recent downside move.
As of this writing, the precious metal is being traded near $16.69. A support may be noted around $16.16, the short term support area ahead of $16.00, the psychological number and then $15.62, the swing low of the last major downside move as demonstrated in the given below daily chart.
On the upside, the precious metal is expected to face a hurdle near $17.32, the trendline resistance area ahead of $17.86, the 50% fib level and then $19.00, the confluence of psychological number as well as swing high of the last major upside rally. The technical bias shall remain bearish as long as the $19.00 resistance area is intact.
Australia’s Producer Price Index
Producer prices rose 0.5 per cent in the December quarter, confirming the message of weak consumer price inflation data earlier in the week. The annual rate of inflation by this measure rose to 0.7 per cent, from 0.5 per cent over the year to the September quarter, according to the the Australian Bureau of Statistics on Friday. The producer price index for final demand measures the price of final products at the factory door or farm gate so, unlike the consumer price index, does not include trade margins, transport costs or taxes on production.
Considering the overall technical and fundamental outlook, selling the precious metal on a retest of the trendline resistance area appears to be a good strategy.