Silver Price Prediction – Silver prices move higher despite a stronger dollar 

Key Insights

• Silver prices rise above the $21 level after facing downward pressure last week.
• Treasury yields eased as investors wait for hints about Fed monetary policy.  
• Oil prices sustained upward momentum amid supply concerns about an embargo on Russian oil

Silver prices traded higher on Monday despite rising yields and a stronger dollar. However, the precious metal still has a bearish outlook as prices remain pressured around multi-month lows.

The dollar extended gains to two-decade highs as investors place bets on a stronger dollar. Benchmark yields slightly lowered as investors await economic data. The ten-year yield slid by 3 basis points today. 

Gold prices fell sharply as investors develop greater bearish sentiment. A stronger dollar underpins bearish gold prices. Oil prices moved higher on Monday as European diplomats showed optimism regarding an agreement about a potential Russian oil ban, which would reduce the oil supply.

The prospect of the oil embargo offset concerns about demand due to the sustained lockdowns in China.

The Empire State Manufacturing Index came in lower than expected. Investors await this week’s economic data about retail sales for clues about the size of the Fed’s next move.

April housing starts will be reported on May 18th, which will signal how interest rate-sensitive sectors like the housing market are faring in tightening financial conditions. 

Economists expect there to be a decline, but activity should remain elevated. Another sector to examine that will indicate how rate hikes are impacting financial conditions is foreign earnings for US companies.

The dollar is strengthening relative to other currencies and is acting as a headwind for economic growth.

Technical Analysis

Silver prices recovered from last week’s lows and held above the $21 level. However, XAG/USD faces a bearish outlook and will face a downward break of the $21 level before moving lower. The trend indicates downward momentum favoring bearish traders. 

Support is seen near the 2019 lows near the $19.60s region. Resistance is seen near the 10-day moving average near the 10-day moving average of 21.82. Short-term momentum turned positive as the fast stochastic had a crossover buy signal.

The medium-term momentum turned negative as the histogram prints negatively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is in negative territory, which reflects the downward trend in price movement.