Silver Price Prediction – Prices Consolidate as Dollar Gains Toe Hold

Silver prices edged lower on Tuesday and traded in a tight range. The dollar found traction after declining for 2 consecutive trading session. The drop in the greenback came despite higher Treasury yields. Since gold is priced in U.S. dollars, a stronger U.S. currency makes gold less attractive in other currencies. The U.S. Trade Deficit rallied to a record high in August, as imports surged.

Technical analysis

Silver prices closed lower but well off the session lows. Resistance is seen near the 50-day moving average at 23.65. Support is seen near the 10-year moving average at 22.42. Short-term momentum is positive as the fast stochastic recently generated a crossover buy signal. 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.

Trade Deficit Hits Record

According to the Commerce Department, the trade deficit surged 4.2% to $73.3 billion in September, the highest since the government. Expectations were for the trade gap widening to $70.5 billion. Imports of motor vehicles, parts, and engines decreased $1.5 billion, reflecting a global semiconductor shortage, which is hampering production. Demand for goods remains strong even as spending is shifting back to services like travel as more people are vaccinated against Covid-19.