Gold edged to new highs for the week on an unexpected surge in the number of confirmed coronavirus infections and deaths. The yellow metal rose more than $7 on Thursday to clear Monday's high at 1577.02.
China announced a rather disturbing 254 additional deaths and 15,152 new infections on Thursday. While this was reportedly the result of a new way of counting cases, the market still swung to a more risk-averse footing, lifting both gold and the dollar.
As of this writing, and based on the Johns Hopkins CSSE site, the total number of cases stands at 60,370. Of those, 59,832 (99.1%) are confined to mainland China. The death toll stands at 1,371. Of those, 1,310 (95.6%) occurred in the PRC.
The Military Times reported earlier in the week that the U.S. military is preparing for a coronavirus pandemic. An executive order was issued by the Joint Staff this month, directing Northern Command to initiate pandemic plans.
[I]n no way “does the planning indicate a greater likelihood of an event developing. As military professionals, planning for a range of contingencies is something we owe the American people.” – Navy Lt. Cmdr. Mike Hatfield
Silver seemed to take on at least a little of its safe-haven persona today, rising 14¢ (+0.8%). However, at this point, the high for the week at 17.84 remains protected.
I'm somewhat encouraged by silver's ability to hold above the 100-day SMA on a close basis. However, at this point, the white metal remains well contained within the recent range. I think a rebound above $18 is needed to encourage renewed buying interest.
The Silver Institute highlighted a "notable improvement in investor sentiment in 2019." They remain optimistic for 2020, projecting a 13% rise in the annual average price to a six-year high of $18.40.
Certainly the Q3 rise last year to the 19.65 high in September was a lot of fun, but silver is very much a "what have you done for me lately market."
Action since that three-year high has been corrective to consolidative. When you zoom out to a monthly chart, you can see how inconsequential recent price action in the grand scheme of things.
Spot Silver Monthly Chart
Within that bigger picture, I'd really like to see a 20-handle to add further credence to the bottoming scenario. Such a move would put the 2016 high at 21.14 in play. If that level ultimately gives way as well, I'd be looking to the 27.45 retracement level.
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