Silver Price Prediction – Prices Slide as The Dollar Surges

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.