Silver Price Prediction – Prices Consolidate as the Dollar Eases

Silver prices consolidated on Tuesday as the dollar eased and U.S. yields declined. The yield differential moved against the greenback as European yields outpaced U.S. yields. Copper prices also rallied on Tuesday, which helped buoy Silver prices. Fed Chair Jerome Powell was on the hill and told Congress that much of the inflation that has increased has come from categories affected by the pandemic.

Technical Analysis

Silver prices moved sideways consolidating and forming a bear flag pattern. This type of pattern is a pause that refreshes lower. Support near an upward sloping trend line that comes in near 25.25. Resistance is seen near the 10-day moving average at 26.96. The 10-day moving average is poised to cross below the 50-day moving average which means that a short-term downward trend is in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The fast stochastic is also printing a reading of 12, below the oversold trigger level of 20 which foreshadows a correction. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a declining trajectory which points to lower prices.

Fed Chair Confirms Inflation is Transatory

Fed Chair Jerome Powell was on the hill on Tuesday providing testimony and question and answers to Congress. The Fed Chair told the committee that inflation is transitory and most of the inflation that has occurred has come from items impacted by the pandemic. Used car sales surged as people scrambled to avoid public transportation. Gasoline prices rebounded as the locked-down were lifted. Congress also pressed the Chair on what likely transitory meant and the percentage that it would only be high for a small period. The Fed said once the reopening is not a reopening anymore than inflation would die down.