Silver Price Prediction – Silver prices edged lower as rising yields decrease its appeal

Key Insights

• Silver prices fall as the dollar rises.
• Treasury yields slide rise amid slowing global economic growth.
• Oil prices marched higher as the EU reached an agreement on the Russian oil ban.

Silver prices fell as the dollar moved higher. Gold prices fall as yields move higher and the dollar reverses last week’s losses. Gold could not capitalize on the dollar’s weakness or lower yields from last week. The dollar strengthened ahead of Fed tightening. 

Benchmark yields rise as investors remain concerned about rising inflation globally despite the reading from Friday indicating that US inflation might be easing.

The ten-year yield declined by 6 basis points. Oil prices surged as the Eu clenched an agreement to ban 90% of Russian oil by the end of the year. The embargo marks the EU’s six packages of sanctions on Russia. The EU stated that emergency measures will be imposed to ensure enough oil supply. 

The Case-Shiller Home Price Index, which was released on Tuesday, indicated that home prices rose 20.6% in March compared to what they were in March 2021. The Case-Shiller index is a three-month running average ending in March.

The reading signals that mortgage rates continue to rise, which was passed on to rising home prices. Mortgage rates came in at 3.29% in January and climbed to 4.67% in March. 

As the Fed hikes rates, mortgage rates continue to rise. People are going to stop purchasing homes shortly if home prices keep rising. The deceleration in home prices is difficult to predict, but price growth cannot go on much longer. 

Technical Analysis

Silver prices face downward pressure as the precious metal broke below the 10-day moving average of 21.89. The 50-day moving average crossed under the 200-day moving average, which is a headwind for XAG/USD and indicates downward momentum.

Silver will likely head to the 2.4 level. XAG/USD maintains a bearish bias as the Fed is likely to raise rates by 50 basis points at its June and July meetings.

Support is seen near the May 13th lows near 20.4. Resistance is seen near former support near the 10-day moving average of 21.89. Short-term momentum turned negative as the fast stochastic had 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 positive territory, which reflects an upward trend in price movement.