Silver prices moved lower but rebounded from session lows as the dollar rallied and yields rose. Prices are looking toppy but have yet to rollover like gold. Silver prices have been rangebound and have not been able to gain any traction. The decline in copper prices has also weighed on silver prices as both are used in the industrial process. The U.S. 10-year increased 5-basis points while the 2-year yield rose 6-basis points, as the Fed changed its dot plots to show that 7 Fed officials believe rates will increase in 2022 compared to just four officials at the last Federal Reserve meeting. The Fed raised its view of growth and inflation.
Silver prices slid on Wednesday but rebounded from session lows and remain rangebound. Support is seen near the 50-day moving average at 27.08. Short-term resistance is seen near the 10-day moving average at 27.73. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. The RSI (relative strength index ) also broke down to new lows which reflects accelerating negative momentum. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.
The Fed Increases Future Inflation Forecast
The Federal Reserve increased its inflation forecast but left interest rates unchanged as widely expected. However, the central bank did not indicate as to when it will begin cutting back on its aggressive bond-buying program. Officials raised their GDP expectations for this year to 7% from 6.5% previously. The unemployment estimate remained unchanged at 4.5%. The Fed raised its inflation expectation to 3.4%, a full percentage point higher than the March projection.