Silver Price Prediction – Prices Whipsaw as Treasury Yields Rise

Key Insights

• Silver prices edged higher.
• Treasury yields rose. 
• The dollar moved higher, weighing on gold prices.

Silver prices attempted to break out but were met with selling resistance again. Gold prices fell, weighing on the entire precious metal complex. The Fed quiet period has started ahead of the FOMC meeting in the middle of the month.

Benchmark yields continued to move higher, with the 10-year closing above 3%.

There is a period ahead of the Fed FOMC meeting called the quiet period where members refrain from making commentary on Fed policy,

The quiet period for Fed members has started ahead of their June 14/15 monetary policy meeting. Last week yields continued to rise in the wake of a strong jobs report. The end of year Fed Funds futures contract is now pricing in rates of 2.70%, which implies another 100-basis points of tightening over the next 2-meetings.

Technical Analysis

Silver prices attempted to move higher but were unable to break out. Support is seen near the 10-day moving average of 21.99. Resistance is seen near the 50-day moving average at 23.18.

The 50-day moving average remains crossed under the 200-day moving average, which is a headwind for XAG/USD and indicates downward momentum. Silver will likely head to the 20.4 level.

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 territory, which reflects a downward trend in price movement.