Silver Price Prediction – Silver prices stabilize near their lows since July 2020 amid risk-off market sentiment 

Key Insights

• Silver prices traded lower as inflation data underpins aggressive rate tightening.
• Treasury yields eased amid risk-off sentiment and sell-off in equities.
• Oil prices rose on Thursday in volatile trading as supply concerns remain in focus.

Silver prices consolidate lower as Treasury yields and riskier assets fall. The dollar hits two-year highs as fearful investors pile in for the greenback’s safe-haven appeal. Benchmark yields pulled back as investors rotated into bonds as the selling of equities continued due to rising inflation pressures.

The ten-year yield dropped 7 basis points today. Gold prices moved lower amid greater selling pressures as the dollar extends gains. Oil prices whipsawed this week, rising on Thursday due to geopolitical tensions regarding the embargo on Russian oil, supply, concerns, and continued lockdowns in China.

Initial jobless claims for last week increased to 203,000 from the revised level of 202,000 from the previous week. This reading was the highest since mid-February.

The reading is consistent with the tight labor market as job openings and quits rates are at a record high. The tight labor market has compelled workers to look for better opportunities. 

Inflation is not going away quickly. While the CPI coming in at 8.3% was firmer than expected, the reading was still below the March reading of 8.5%. The reading supports the Fed’s plan to more aggressively tighten rates due to mounting inflation pressures.

Technical Analysis

Silver prices traded below the $21 level amid heightened risk-off sentiment and greater concerns over inflation. The continued break below the $22 mark indicates a downtrend in momentum favoring bearish traders. Further downside for XAG/USD is likely.

The metal is on track to see additional losses near the $21 level and head to the key psychological mark of $20.

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 22.14. 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.