Silver Prices Pulled Back Despite Rising Inflation Concerns 

Key Insights

• Silver prices moved lower despite increased demand for safe-haven assets.
• Benchmark yields continued to rise as investors digest hot inflation.
• Oil prices moved lower amid uncertain supply concerns.

Silver prices retreated today, looking to snap a six-day winning streak. Despite the pullback, silver prices should remain in high demand due to increasing inflation concerns and the Russia-Ukraine War. Benchmark yields continued to rise amid rising inflation. Gold and silver prices remain a hedge against inflation.

Oil prices declined amid uncertain supply concerns. While the global tightening of supply remains an issue due to the potential Russian oil shutdown, the EIA last week stated the plan for member states to release strategic reserves. 

US retail sales rose by 0.5% in March amid rising inflation and increased by 6.9% y-o-y. Gas station sales led gains as retail sales are not adjusted for inflation. The greatest losses were incurred by online sales, which dropped by 6.4%.

Initial jobless claims rose to 185,000, increasing by 18,000 from the previous week. Despite that export prices increased more than import prices, the US trade deficit has deteriorated. Inflation has hit imports as prices have increased by 2.6 % and 12.6% on a month-to-month basis.

Technical Analysis

Silver prices eased after ending six consecutive trading sessions in the green. Despite this, silver prices continue to be in an uptrend as a hedge against inflation globally and as a result of the Russia-Ukraine War. Support is seen near the 10-day moving average of $24.9. Resistance is near the March 24th high near $25.845. A break higher would test the $26.00 level. Short-term momentum turned negative as the fast stochastic had a crossover sell signal.

The medium-term momentum turns positive as the histogram prints positively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is in positive territory, which reflects the upward trend in price movement.