Silver Price Prediction – Prices Drop on Powell Renomenation

Silver prices moved lower, declining 1.4% after finishing the week lower. The dollar moved higher as U.S. short-term treasury yields surged in the wake of the decision by President Biden to renominate Fed Chair Powell. Strong gains in the greenback put downward pressure on the entire precious metals complex. Gold prices also tumbled, weighing on silver.

Technical analysis

Silver prices moved lower and are poised to test target support near an upward sloping trend line that comes in near 23.95. Additional support is seen near the 50-day moving average at 23.54. Resistance is seen near the 10-day moving average at 24.82. 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 is also negative as the fast stochastic recently generated a crossover sell signal.

Biden Renominates Powell

President Biden announced that he will renominate Jerome Powell as the Fed Chair and nominate Lael Brainard to the Vice-Chair of the Federal Reserve. The continuity provided by renominating Jerome Powell, a Republican appointed by former President Trump, was well received by market participants. Yields rose because many believe that Powell will be more aggressive with interest rate hikes than Brainard, the other potential nominee for Fed Chair. Presently the markets have priced the first rate hike by the Fed in July of 2022.