Key Insights
- Silver prices moved lower.
- The dollar rallied.
- Treasury yields surged higher on robust CPI data.
Silver prices moved lower along with most of the precious metals complex. U.S. Treasury yields continued to rebound, despite a higher-than-expected increase in jobless claims. On Friday the Labor Department will release its CPI report. A much stronger than expected number will spook the market.
The Bureau of Labor Statistics reported on Friday that CPI rose 8.6% year-over-year strong than the 8.3% expected. Headline inflation remains strong due to energy and food prices. Excluding volatile food and energy prices, core CPI was up 6%, slightly higher than the 5.9% estimate. Monthly, headline CPI was up 1% while core rose 0.6.
Technical Analysis
Silver prices moved lower, slipping through support which is now resistance near the 10-day moving average of 21.92. Support is seen near the June lows at 21.43. Prices appear to be forming a head and shoulder pattern that could target the May lows.
The 50-day recent crossed below the 200-day moving average, which is a headwind for XAG/USD and indicates downward momentum.
Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal.
The medium-term momentum turns positive as the histogram prints positively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is in negative, which reflects consolidation.
