Silver Prices Consolidate ahead of FOMC Meeting

Key Insights

• Silver prices soften
• The Dollar bounced slightly
• U.S. Benchmark Treasury yields continue to surge
• Gold prices decline as investors bet on decreasing geopolitical tensions

Silver prices fell on Monday as US treasury yields break out due to expectations for the Fed to kick off the rate hike. Geopolitical pressures die down as both sides are willing to talk, causing gold prices to decline. US stocks rose while oil prices tumbled. The Federal Reserve is expected to raise interest rates by 25 basis points at its two-day FOMC meeting later this week. 

There are no government economic reports today. The New York Fed released its survey of consumer expectations. The survey is based on a rotating panel of 1,3000 households. Consumers in February expected to increase their spending by 6.4% in one year. This expectation rose from 5.5% from the previous month. Consumers expectations for inflation rose to 6.0% from 5.8% in January. 

Technical Analysis

Silver prices moved lower ahead of the Fed’s rate hike.The pattern could be a consolidation pattern that is a pause that refreshes higher. A new March high would confirm the breakout. The risk is to the upside. Support is near the 10-day moving average that comes in near $25.64. Resistance is seen near the March highs at 26.94. Short-term momentum is positive as the fast stochastic moves toward a crossover buy signal.

The medium-term momentum is positive as the histogram prints positively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is flattening, which reflects the consolidation of the flag pattern.