Yahoo Finance Silver Price Prediction – Silver prices reverse gains as the dollar snapped a two-day losing streak
Key Insights
Silver prices moved lower.
Treasury yields traded flat despite concerns over slower economic growth.
Oil prices surge amid lower inventories.
Silver prices slid on news of more Fed rate hikes. Gold prices fall as the dollar recovers in the wake of Fed minutes. The dollar has rebounded from its two-day losing streak against a basket of other currencies.
Benchmark yields remained little changed as the Fed reiterated its aim to rein in inflation. The ten-year yield dropped by only 1 basis point today as investors digested the latest news.
Oil prices rise on little production growth and storage levels that are below the five-year average. Rising oil prices have contributed to increased inflationary pressures.
The Fed released its May minutes today, signaling that the Fed will likely make more 50-basis point rate hikes than what the market already has priced in. Inflation has been skewed upward, which means that rate hikes will be skewed upward as well. A more hawkish Fed has led to greater concerns over slower economic growth.
Investors must weigh how much risk there is to a potential recession if the Fed keeps on aggressively tightening rates to control inflation. Investors await crucial economic data including quarter one GDP, which will be released later this week. This data will indicate the US economic condition and outlook.
Technical Analysis
Silver prices edged lower near the 10-day moving average, reverse from yesterday’s gains on inflation concerns. Prices retreat from the $22 level, indicating that recent bullish momentum is waning. A hawkish Fed means that there will be a stronger dollar, signaling a bearish outlook for XAG/USD.
Support is seen near the 10-day moving average of $21.607. Resistance is seen near the 200-day moving average of 23.573. Short-term momentum is positive as the fast stochastic had a crossover buy signal.
The medium-term momentum turns positive as the histogram prints positively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is in positive territory, which reflects an upward trend in price movement.
This article was originally posted on FX Empire
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