Silver Price Prediction – Silver Rallied on Dollar Weakness

Key Insights

• Silver prices rebounded after breaking down on Tuesday.
• Treasury yields pulled back despite a robust CPI print.
• U.S. Treasury yields whipsawed and then moved lower.

Silver prices rose on Wednesday and the rest of the precious metals complex. The dollar edged lower as yields declined. Despite a stronger-than-expected headline and core CPI report, Benchmark yields eased today. Gold prices strengthened as the dollar eased.

CPI Rose More than Expected

The U.S. Labor Department released April CPI on Wednesday. The headline CPI came in at 8.3%, slightly less than March but more than the 8.1% expected by economists. The report also showed that core CPI, excluding food and energy, increased by 6.2% year over year, higher than expected. The month-over-month gains also were higher than expectations. The BLS reported that April inflatino rose  0.3% on headline CPI versus the 0.2% estimate and a 0.6% increase for core, against a 0.4% gain outlook.

Technical Analysis

Silver prices rebounded after breaking down, recapturing short-term support near the September lows at 21.42.

Resistance is seen near the 20-day moving average of 23.52. The 20-day moving average crossed below the 50-day moving average, which means a medium-term downtrend is now in place. Short-term momentum has turned positive as the fast stochastic crossover buy signal. Prices are oversold as the fast stochastic is printing a reading of 13 below the oversold trigger level of 20.

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.