Silver Price Prediction – Prices Break Out and Poised to Test September Highs

Silver prices continued to rally, pushing through support as gold moved higher and the dollar whipsawed. U.S. yields were lower following a softer than expected PPI  report. Jobless claims declined more than expected but failed to buoy yields and the greenback, which provided the impetus for higher silver prices.

Technical analysis

Silver prices moved higher rising through target resistance which is the 50-day moving average near 23.29. Target resistance is the September highs at 24.82. Short-term momentum is positive as the fast stochastic recently generated a crossover buy signal. Prices are overbought as the fast stochastic is printing a reading of 98, above the overbought trigger level of 80. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Producer Prices Rise Less than Expected

The producer price index increased 0.5% in September, slightly below the 0.6% expected. However, on a 12-month basis, the index increased 8.6%, a fresh record for a data series that goes back to November 2010 and is reflective of the current inflationary climate, according to the Labor Department. Excluding food and energy, the core PPI rose just 0.1% versus the 0.5% forecast, putting the 12-month gain at 5.9%, the highest level since March 1982.