Silver Price Prediction – Prices Rose as Yields Declined Following Fed Testimoney

Silver prices moved higher as wholesale inflation rose more than expected on the headline and core levels, but comments from the Fed testimony offset the hawkish numbers. Yields moved lower, giving back most of the gains they experienced on Tuesday. This movement in yields weighed on the dollar, paving the way for higher silver prices.

Technical analysis

Silver prices moved higher on Wednesday pushing back through resistance which now is support near the 10-day moving average of 26.16. Resistance is seen near the 50-day moving average at 27.04. Additional support is seen near an upward sloping trend line that comes in near 25.75. Short-term momentum flip-flopped and turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Wholesale Price Rose on Wednesday

The PPI headline surge was reported the day after the Labor Department reported a 5.4% year-over-year jump in the consumer price index, the biggest move for that measure since 2008. The producer price index differs from the CPI in that it measures final demand prices that companies get for their goods. Specifically, 20% of the June jump in producer prices came from a 10.5% bump in autos and auto parts retailing. Meanwhile, 70% of the increase came from trade services, which were up 2.1%. Energy also played a big role, with final demand prices rising 2.1% in June. Food prices rose 0.8%.