Silver Price Prediction – Silver prices slid sharply as the dollar rises

Key Insights

• Silver prices fall as yields surged.
• Treasury yields climb to the highest levels since 2018.
• Oil prices tumbled amid stronger dollar and demand concerns in China. 

Silver prices pull back sharply as yields and the dollar extend gains. The dollar rose against other major currencies. Benchmark yields continue to soar due to growing concerns about spiraling inflation and slower economic growth. The ten-year treasury yield rallied to 3.185% in the wake of the Fed tightening rates. 

Gold prices fall as the dollar strengthens. Oil prices were weighed down by a stronger dollar and demand concerns amid China’s lockdowns. A pledge by the G7 nations to ban or phase out Russian oil followed the EU’s proposal for phased sanctions on Russian oil.

US wholesale inventories increased by 2.3% in March compared to the previous month, which was in line with economists’ expectations. Wholesale inventories increased 22% year-over-year. Inventories are a part of gross domestic product and go into the GDP calculation. 

Inflation data that will be released on Wednesday will likely signal the size of the Fed’s next move. 

Technical Analysis

Silver prices fell to their year-to-date low below the $22 level. A sustained break below the $22 mark will signal further downside and selling pressure for XAG/USD. Silver may test the December low near $21.40. below the $23.00 level despite the Fed’s less aggressive monetary policy.

Despite that ruling out a 75-basis point hike removed greater downside to precious metals, the Fed’s goal to reduce inflation weighs on silver prices.  

Support is seen near the February 3rd low of $22.0. Resistance is seen near the 10-day moving average of 23.77. Short-term momentum is negative as the fast stochastic had a crossover sell 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.