Silver Price Prediction – Prices Rally But Settle of Their Highs

Silver prices broke but closed well off the highs of the session.  This change in prices came despite a stronger dollar and higher yields. Consumer inflation hit a 30-year high in the U.S. and was also very strong. This news followed a stronger than expected U.S. PPI report reported on Tuesday. The move in the yellow metal came despite a rally in the greenback along with rallied in both the 10-year and 2-year Treasury yields.

Technical analysis

Silver prices rallied and closed above a downward slopiong trend line that comes in near 24.45. Additional support is seen near the 10-day moving average at 24.04. Short-term momentum has turned positiveas the fast stochastic generates a crossover sell signal. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Consumer Inflation Continues to Accelerate

The Labor Department reported that consumer inflation hit its highest point in more than 30 years. The consumer price index rose 6.2% year over year, the most since December 1990. That compared with the 5.9% estimate.  Monthly, the CPI increased 0.9% against the 0.6% estimate. Eurodollar futures contract now points to a hike as early as July. This change is an increase from September 2022. The Fed has already told the markets that they plan to taper their bond purchase program in November.