Silver Price Prediction – Prices Consolidate as Inflation Fears Remain

Silver prices moved higher and consolidated for the third straight trading session as it attempted to form a bottom. This change could also be a bear flag continuation pattern, a pause that refreshes lower. The dollar moves higher. The Silver ishares ETF also edge up. Yields moved higher as the market continued to focus on inflation fears. The combination of higher unit labor costs and lower productivity help stoke those inflation expectations.

Technical Analysis

Silver prices moved higher following last weeks drop. Prices are poised to test target, support is seen near the September lows at 21.42. Resistance is seen near the 10-day moving average at 22.82. The 10-day moving average has crossed below the 50-day moving average which mean a short-term downtrend is now in place. Medium-term momentum has turned negative as the MACD (moving average convergence divergence index) generated a crossover sell signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are still oversold as the fast stochastic is printing a reading of 15, below the oversold trigger level of 20.

Inflation Fears Remain

Unit labor costs, or the measure of how much businesses pay their per unit of input, rose 9.6% from Q2, which reflected a 3.9% increase in compensation combined with the decline in productivity. That was well above the 8.4% expectations by economists.