Silver Prices Consolidate as Yields Retreat 

Silver prices remained in a range on Wednesday ahead of mounting inflation pressures. Despite the 10-year yield holding above 1.9%, US benchmark yields pulled back. Gold prices edged higher for the fourth consecutive trading session as the US dollar softened. The possibility of an ECB rate hike moved the Euro slightly higher. Fed officials speak today ahead of tomorrow’s key inflation report. The likelihood of a 50% bp hike has decreased to 30%, and no Fed official has endorsed the move. 

Technical Analysis

On Wednesday, silver prices edged higher ahead of tomorrow’s CPI report. Support is now the former resistance level seen near the 50-day moving average at 22.81. Resistance is seen near the 200-day moving average at 24.44. Short-term momentum is positive but decelerating as the fast stochastic converges to a crossover sell signal. The fast stochastic is printing a reading of 46.42. Medium-term momentum turns positive as MACD (moving average convergence divergence) index moves toward a crossover buy signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses over the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram prints in negative territory with an upward sloping trajectory. Negative momentum is decelerating, which points toward higher prices.

Russia’s January Inflation Accelerates Ahead of Central Bank Tightening

Annual inflation in Russia surged to 8.73% in January 2022, increasing from 8.39% in December 2021. Economists forecasted that the increase in inflation would be to 8.8%. The rate is the highest it has been since January 2016. The central bank’s target inflation rate is 4%. Food prices, non-food products, and services caused upward pressure. This acceleration is expected to generate a 100 bp rate hike when the central bank meets at the end of the week.