Silver Prices Rally Despite Rising Dollar and Yields

Key Insights

• Silver prices surged amid inflation concerns and Ukraine uncertainty 
• The dollar rose as data supports larger Fed rate hikes in May
• U.S. Benchmark Treasury yields climbed higher following positive job data
• Oil prices slid as supply concerns remain amid CPC pipeline disruption and the Iran deal

Silver prices rose on Wednesday as it continues to have safe-haven appeal amid concerns over inflation. US benchmark yields jumped to recent highs, with the 10-year yield near 2.34%. The dollar moved higher as economic data have increased expectations for a rate hike over 25 basis points in May. Oil prices dipped as supply concerns lingered due to CPC pipeline disruption and the lack of an Iran deal. Investors monitor how the US will impose new sanctions on Russia.

This week, initial jobless claims fell to 187,000, decreasing to the lowest level since 1969. Economists predicted that the reading would be 212,000. The labor market is tightening as fewer Americans are on unemployment rolls. Additionally, companies are desperate for workers. 

Technical Analysis

Silver prices rose above the $25.50 mark, reaching 10-day highs. The break above the 10-day moving average of 25.18 could signal a near-term rally. Silver prices might test the level of $27, highs earlier this month. 

Support is near the 50-day moving average near 24.18. Resistance is seen near the downward sloping trendline near 26.0. Short-term momentum is positive as the fast stochastic had a crossover buy 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 but decelerating, which reflects the upward trend in price movement.