Silver Prices Rally in the Wake of Strong Economic Data 

Silver prices surged on Monday after last week’s robust US jobs data. Gold prices increased to more than their one-week highs as rising inflationary pressures have caused increased demand. The US dollar declined against the Euro last week, buoying silver prices. Benchmark yields remained little changed at their highest levels as investors digest the previous week’s economic data. Investors will be watching the consumer price index on Thursday for critical inflation data. This data might help investors predict how much the Federal Reserve will raise rates next month.

Technical Analysis

On Monday, silver prices rose above the ten-day moving average. Support is now the former resistance level seen near the 50-day moving average at 22.81. Resistance is seen near the 10-day moving average at 22.83. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. The fast stochastic is printing a reading of 34.43. 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.

Weak German Industrial Production Data 

German Industrial output decreased by 0.3% in December, indicating that the German economy contracted and is weakening. A Bloomberg survey forecast called for a 0.5% increase. Investors will watch for the European Commission’s updates to its economic forecast later this week.