Silver Prices Are Under Pressure as Equities Rally Despite Stalling of Russia-Ukraine Peace Talks

Key Insights

• Silver prices test last week’s lows as a robust risk appetite weighs on demand for the safe-haven asset
• The Dollar eased as Powell’s comments fade and risk-on sentiment emerges
• U.S. Benchmark Treasury yields climbed higher due to Fed’s hawkish stance
• Oil prices reverse gains as E.U. does not opt to join the U.S.’s ban on Russian oil 

 

Silver prices face pressure on Tuesday as equities and bond yields rally despite the continuation of geopolitical conflict and Fed Chair Powell’s hawkish comments. U.S. benchmark yields climb higher/. The ten-year yield rose 6.4 basis points, the highest since 201 following Powell’s remarks that the Fed could raise rates by more than 25-basis points at a meeting or future meetings to rein in inflation. Gold prices slide as yields surge. Oil prices tank amid uncertainty about the E.U.’s joining of the Russian oil embargo.

 

Fed Chair Powell spoke at the NABE conference yesterday and reiterated that the Fed would hike rates a half point instead of a quarter-point to control mounting inflation. This situation sent yields soaring as his comments resulted in a sharp sell-off of the bond market. Investors are pricing in a 50-point hike in May. 

Technical Analysis

Silver prices moved lower as equities and yields rallied following the Fed’s comments yesterday. Silver prices are already down 1.67% from the highs from an earlier trading session. A breakdown below $24.50 can lead to a slide to the 200-day moving average near $23.99. The risk is to the downside. 

Support is near the 200-day moving average near 23.99. The support-turned-resistance is seen near the 10-day moving average of $25.29. Short-term momentum is negative as the fast stochastic had a crossover sell signal.

 

The medium-term momentum is 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.