Silver Price Prediction – Prices Rise as Treasury Yields Decline

Silver prices continued to chop sideways rebounded after last week’s slump.  Silver prices moved slightly higher despite a rise in the greenback as U.S. yields tumbled lower. There is a two-day Fed meeting this week. Most expect the Fed to accelerate its tapering and for individual forecasts to shift, reflecting an inflation picture that is not transitory. The U.S. will also be releasing PPI and Retail Sales.

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.

The Fed is On Deck

The Fed meeting this week is the key event that will move the market. Expectations are for the Fed to announce a quicker unwind of these bond purchase programs. In addition to the Fed meeting, the U.S. will release both Producer prices, which are expected to come in 9% and 7%, excluding food and energy. The Commerce Department will also release U.S. Retail sales later in the week.