Silver Breaks Through Support Declining for 5th Consecutive Day
Silver prices spiraled lower on Thursday, dropping for the fifth straight trading session in the wake of the Fed decision. The US dollar rallied as strong economic data justifies the case for an imminent rate hike. US stocks whipsawed and US Treasuries declined after the better-than-expected fourth-quarter GDP report. Although the two-year moved slightly higher, the 10-year dropped by 4 basis points. Gold prices tumbled in the wake of the Fed meeting.
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Technical Analysis
On Thursday, silver prices tumbled below the 50-day moving average in the wake of the Fed decision, plunging below support. Support is seen near the 10-day moving average at 23.64 and resistance is seen near the 50-day moving average at 23.0. Short-term momentum is negative as the fast stochastic is printing a reading of 18.58, below the oversold trigger of 20. Medium-term momentum is turning negative as MACD (moving average convergence divergence) index crossover indicates a sell signal. The MACD line (the 12-day moving average minus the 26-day moving average) is crossing over the MACD signal line (the 9-day moving average of the MACD line), as momentum might turn negative.
Fourth Quarter GDP Rose More Than Expected
Fourth-quarter GDP increased by 6.9% this year, beating expectations of 5.5%. Additionally, consumer spending rose 3.3% for this quarter compared to 2% in the previous quarter. Despite the end of government stimulus, economists predict that US growth will be around 4% in 2022.
