Silver Prices Face Downward Pressure as Yields Surge Higher

Key Insights

• Silver prices moved lower as benchmark yields rise.
• Treasury yields rally as Fed Chair Powell speaks on the global economy at IMF.
• Oil prices recover due to lingering supply concerns.

Silver prices continued to decline as benchmark yields rally amid expectations for tighter monetary policy. Benchmark yields continue to spike as Fed Chair Powell speaks on the global economy at IMF. This situation comes as investors show concerns around rising inflation and tighter hawkish monetary policy. 

Gold prices declined as treasury yields continued to surge and more risk-on sentiment in the market. Oil prices traded higher in a narrow range in the wake of the IMF reducing economic growth expectations and supply losses from Libya.

Weekly jobless claims came in at 184,000, decreasing by 2,000 from the previous week. The Dow Jones estimate was 182,000. The data signals that the job market remains tight.

The number of job openings and demand for workers exceeded the labor pool. While the job market has shown progress, it has not caught up to pre-pandemic conditions.

The Philadelphia Manufacturing Index, which measures orders, delivery times, and shipments, came in at 17.6. This reading showed a decline of 10 points from March. delivery times. Manufacturing expanded but at a slower-than-expected pace.

Technical Analysis

Silver prices face selling pressure, hovering near the $26.5 level as bearish sentiment weighs on the safe-haven asset. Silver prices see an ongoing downward trajectory despite rising inflation. An attempted recovery could encounter resistance at the key psychological level of $25.00, but an upward move will be met with more selling.

Support is seen near the April 5th low near $24.25. Resistance is near the 10-day moving average of $25.30. 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.