Silver investments: more bad news? IMF warns of further cuts in global growth forecasts. Silver price narrow concussion!

After two days of trading in a narrow range, physical silver remained in an extremely narrow trading range on Wednesday (May 13), currently hovering around $15.55, with a clear lack of stimulus that could be triggered by today’s comments from federal reserve chairman colin Powell.

Silver prices continued to trade in a narrow range last week, generally around the 60-day moving average, as investors weighed the possibility of a second wave of infections against hopes that a loosening of restrictions on home stays could fuel a U.S. economic recovery.

Statistics from real-time data update website worldometers show that as of 10:44 Beijing time on May 13, there have been more than 4.34 million confirmed cases of covid-19 worldwide, with a total of 4,342,345 confirmed cases and 292,893 deaths of more than 290,000.

Among them, there were more than 1.4 million confirmed cases of covid-19 in the United States, or 1,408,636 cases, and more than 80,000 deaths, or 83,425 cases.

So far, countries such as China, South Korea and Germany have lifted blockades, but reports of a new wave of coronavirus infections in those countries appear to have heightened concerns.

Recent bad economic data have underscored the depth of the devastation caused by the outbreak, and investors are starting to worry that even if it does reopen, the recovery may not be as strong as expected.

Phil Blancato, chief executive of Ladenburg Thalmann asset management, said: “from a scientific point of view, if we reboot too quickly, we’ll go back to where we started. But if we don’t reboot at all, our economy will be paralyzed.”

Market participants such as Dennis Dick, a proprietary trader at Bright Trading LLC, are eager to lock in profits amid fears the market could fall. “People are very nervous about the prospect of restarting the economy,” he said.

Meanwhile, international monetary fund (IMF) managing director Elena georgieva said on Tuesday that she may cut her global growth forecast further, as the outbreak has hit many economies harder than previously thought.

“The latest figures from many countries are worse than our already pessimistic forecasts,” ms georgieva said at a financial times webcast conference. “it is very likely that we will update our forecasts sometime in June, when… Our expectation is that we will see more bad news in 2020.”

The IMF forecast in mid-april that global output would contract by 3 per cent this year, with emerging and developing economies contracting by 1 per cent and advanced economies contracting by 6.1 per cent.

The IMF usually revises its forecasts in its world economic outlook report in early July.

“As the crisis continues to spread, the outlook is worse than our already pessimistic forecast,” ms georgieva said on Tuesday. Without a health solution on a global scale, many economies are likely to be worse off.”

She added that the group’s earlier forecasts for domestic resources and external financing were low, so it expects the figures to be revised up when the new global economic forecasts are released.

Debt sustainability remains a major concern, she said, and countries need to build more resilient economies to deal with future crises.

Technical analysis:

The dollar

Daily chart, the dollar index recently maintained a volatile pattern, trading near the 100 level, the overall above the main average level. Technically, the MACD red kinetic energy column initially appeared, RSI index hovering around 50, KDJ random index approaching oversold level, suggesting or continue consolidation.

On the 4-hour chart, the usd index seems to form upward highs and lows, focusing on whether the recent support 99.65 will be broken, more short-term support to look at the 100 moving average level. MACD green kinetic energy column slightly expanded, KDJ random index fell below the 50 level, short – term still face downward pressure.

silver

On the daily chart, silver continued the momentum of the previous two days of narrow shock, currently hovering around 15.50, pay attention to the ability to stand on the 60 day average level. The MACD red kinetic energy column expanded slightly and the KDJ random index approached the overbought level, suggesting there is still room to rise.

4 hours on the chart, silver still maintain a high consolidation trend, now above the level of the main moving average, focus on whether to break this pattern. MACD green kinetic energy column slightly expanded, KDJ random index hovering slightly above the 50 level, short line or continue to oscillate.

Fundamental positive factors:

  1. According to statistics from real-time data update website worldometers, as of 10:44 Beijing time on May 13, the global total number of confirmed covid-19 cases exceeded 4.34 million, with a total of 4,342,345 confirmed cases and 292,893 deaths exceeding 290,000.
  2. The novel coronavirus that has killed 80,000 americans has not been brought under control and treatments and vaccines may not be ready until late August or early September, Anthony Fauci, director of the national institute of allergy and infectious diseases, told congress on Tuesday.
  3. The CBOE market volatility index.vix, Wall Street’s fear gauge, rose 5.47 points to 33.04 on Tuesday, its biggest one-day point gain in more than three weeks.
  4. The interest-rate options market suggests a 23% chance that the fed funds rate will turn negative by the end of December, according to bank of America. The likelihood of digestion last week was 9% to 10%.

Fundamental negative factors:

  1. Atlanta federal reserve bank President Raphael Bostic said recently that negative interest rates are not a good option in a time of crisis.
  2. James Bullard, President of the st Louis federal reserve bank, reiterated his scepticism about negative interest rates, noting that the strategy had historically had mixed results and was “not a very good solution for the us”. Dallas federal reserve bank President Robert Kaplan recently told CNN he opposes negative interest rates.
  3. Amid rising tensions between China and the United States, China’s tariff commission of the state council on Tuesday announced a new list of goods to be exempted from additional U.S. tariffs, including 79 items including rare earth metals and gold ore.
  4. Senior trade representatives from the United States and China played down serious differences over economic losses caused by the novel coronavirus pandemic and said they would press ahead with the implementation of the “first phase” trade agreement after the call.

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