Silver Price Prediction – Prices Slide Following Fed Minutes

Silver prices tumbled on Thursday in the wake of the Fed’s meeting minutes. The dollar moved higher but was unable to break out. U.S. yields moved higher across the interest rate curve following and with the 2-year yield hitting the highest levels since March of 2020. The softer than expected ISM services report did little to help ease yields.

Technical Analysis

On Thursday, silver prices tumbled as yields continued to rise. Support is seen near the December lows at 21.69. Resistance is seen near the 10-day moving average at $22.90. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are oversold as the fast stochastic is printing a reading of 12, below the oversold trigger level of 20. Medium-term momentum is about to turn negative as the MACD (moving average convergence divergence) index is poised to generate a crossover sell signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

The Fed Minutes Drive Silver Prices

On Wednesday, the Fed meeting minutes were a huge catalyst in the silver market. The Fed minutes show that participants are more hawkish than expected and were potentially behind the curve as inflation accelerated quicker than expected. This situation could lead to a rate hike as soon as March, which is now priced into the interest rate market.