Silver Price Prediction – Prices Fall as Powell Takes Hawkish Tone

Silver prices continued to break down. The dollar whipsawed following weaker than expected Chicago PMI data and strong inflation rhetoric from Fed Chair Jerome Powell. Powell, in a statement, said the Fed would accelerate its bond purchase program, which could set the Fed up for a rate hike as early as May.  Yields were mixed, which flattened the curve. Home prices rose nearly 20% year over year stoking inflation fears.

Technical Analysis

Silver prices broke and are poised to test target, support is seen near the November lows at 17.58. Resistance is seen near the 50-day moving average at 23.57. 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 oversold as the fast stochastic is printing a reading of 2, below the oversold trigger level of 20.

Home Prices Rose

Home prices rose 19.5% in September year over year, down from a 19.8% annual gain in August, according to the S&P CoreLogic Case-Shiller national home price index. That is the first decrease in the annual gain since May 2020. The 10-city composite rose 17.8% from a year ago, down from an 18.6% gain in August. The 20-city composite gained 19.1% year-over-year, down from 19.6% in August.