Silver Price Prediction – Prices Drop as the Dollar Gains Traction

Silver prices moved lower and continued to trend lower.  Gold prices declined taking down the entire precious metals complex. The dollar moved higher. Yields also moved higher despite riskier assets like stocks moving lower. Wholesale inflation rates rose more than expected ahead of the Fed’s two-day meeting. Most expect the Fed to accelerate its tapering and for individual forecasts to shift, reflecting an inflation picture that is not transitory. The Fed is now expected to raise interest rates twice in 2022.

Technical Analysis

Silver prices moved higher on Monday. Prices are trading above target, support is seen near the September lows at 21.42. Resistance is seen near the 10-day moving average at 22.38. The 10-day moving average has crossed below the 50-day moving average, which means a short-term downtrend is now in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term negative momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in negative territory with a rising trajectory which points to consolidation.

U.S. PPI rose by 9.6% year over year after rising another 0.8% in November. Expectations were for an annual gain of 9.2%. Core prices rose 0.7% for the month, putting core PPI at 6.9%, also the largest gain on record. Estimates were for respective gains of 0.4% and 7.2%, meaning the monthly gain was faster than estimates but the year-over-year measure was a bit slower.