Silver Price Prediction – Silver prices face downward pressure amid a more hawkish Fed

Key Insights

  • Silver prices face downward pressure.
  • Treasury yields declined on sell off in stocks.
  • Oil prices fall as US companies plan to increase supply. 

Silver prices face downward momentum on a stronger dollar and more aggressive Fed monetary policy. The dollar rallies to two-decade highs as investors place bets longing the dollar. Benchmark yields erased gains as investors piled into bonds due to the sell off in stocks. 

The Dow Jones and Nasdaq saw huge daily declines as inflation concerns rose following earnings reports. The ten-year yield slid by 9 basis points today. Oil prices decline as US companies plan to increase output, which offsets supply concerns from the Russian oil embargo.

April housing starts fell by 0.2% amid rising mortgage rates. The 30-year loan increased to 5.3% last week from 2.94 a year ago. Spiraling inflation combined with high material prices has weighed on the housing market. 

Philadelphia Fed President Harker stated that the Fed will have two 50-basis point hikes in June and July at the FOMC meetings.

Technical Analysis

Silver prices could not break the $21.50 level despite risk-off sentiment. Prices remain above the key $21 level. However, XAG/USD faces a bearish outlook amid Fed expectations for rate hikes. 

Support is seen near the $21.00 level. A break of that would leave the support at the May 16th low of 20.84. Resistance is seen near the 10-day moving average near the 10-day moving average of 21.49.

Short-term momentum might turn positive as the fast stochastic might have a crossover buy signal.

The medium-term momentum turns positive as the histogram prints less negatively 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.