Silver Price Prediction – Prices Slip But Settle off Their Lows

Silver prices moved lower but bounced from session lows following the Fed decision.  The dollar moved higher and is poised to break out.  Yields also moved higher across the interest rate curve but flattened as the markets started to price in further interest rate hikes. Economic growth also remains rapid, the Fed said. The median inflation projection falls from 5.3 in 2021 to 2.3 in 2022. Chair Powell also said that bottlenecks and supply contractions are larger and longer than expected. He believes the Fed will reach its goal of 2% inflation next year.

Technical Analysis

Silver prices dropped but bounced from session lows at support near September lows at 22.10. Resistance is seen near the 10-day moving average at 22.24. The 10-day moving average has crossed below the 50-day moving average, which means a short-term downtrend is in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term negative momentum is poised to turn positive as the MACD (moving average convergence divergence) index is about to generate a crossover buy signal.

The Fed doubled the size of their tapering to 30-billion dollars from 15-billion dollars a month and kept rates unchanged. The medium interest rate for 2022 is 0.9% larger than prior but also priced into interest rate futures contracts.  The market now has between 2 and 3 rate hikes in 2022.  Short-term interest rates rose more than long-term rates, flattening the curve. Imbalances in the supply chain are generating inflation. The Fed said that job gains have been very robust.  Powell also said that rising covid cases of omicron pose a risk to the outlook.