Silver Price Prediction – Prices Slide on Weak Manufacturing Report

Silver prices continued to move lower after, hitting resistance. The dollar was mixed despite a strong upward move in U.S. yields. The move-in Treasuries seemed to put downward pressure on the silver prices. Gold prices were also lower which put downward pressure on the entire precious metal complex.

Technical analysis

Silver prices moved lower to support near the 50-day moving average at 23.26. Additional support is seen near the 10-day moving average at 22.86. Short-term momentum turned negative as the fast stochastic generated a crossover sell signal. Prices are overbought as the fast stochastic is printing a reading of 88, above the overbought trigger level of 80, which could foreshadow a correction. 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). The MACD histogram is printing in positive territory but the upward sloping trajectory is decelerating, which points to consolidation.

Manufacturing Declines

The Federal Reserve reported that manufacturing output fell 0.7%, dragged down by a 7.2% decline in motor vehicles and parts as shortages of semiconductors. Additionally, U.S. industrial production fell 1.3% in September, more expected as the lingering effects of Hurricane Ida continue to generate contraction. The Federal Reserve reported that most of 0.6%, of the overall decline in total industrial production, was attributable to the hurricane.