Silver Prices Rise Amid China Shutdown Fears and Geopolitical Uncertainty

Key Insights

• Silver prices whipsawed and moved higher
• The dollar reached 2-year highs 
• Benchmark yields surge as investors continue to digest FOMC meeting minutes

Silver prices traded higher as its safe-haven qualities appealed to investors. The Russia-Ukraine War and lockdowns in China remain in focus. Benchmark yields continued their climb as the 10-year yield rose to 2.76%, and the 5s-30s curve remains inverted.

Gold and silver prices extended gains amid uncertainty in the Russia-Ukraine war. 

Oil prices fell to their lowest level since March 17th. Shutdowns in China due to COVID-19 led to the drop in oil prices. The shutdowns could lead to a substantial hit to oil demand as China is the world’s largest oil importer. This provides an impetus for demand for safe-haven assets like silver.

The week begins quiet week on the data front, with Fed speakers discussing rate hikes. The focus remains on the March CPI, released tomorrow.

Economists anticipate that the CPI will have risen to 8.4% from the previous month’s 7.9%. Core PCI is expected to increase to over 6.5%. Some analysts expect the CPI to peak shortly since the Fed plans to enact hawkish policy to tighten inflation.

Technical Analysis

Silver prices whipsawed and moved higher, trading up 0.9% near the 24.98 level. Rising inflation due to the Russia-Ukraine War and China shutdown concerns, driving up silver prices. 

Resistance is near the $26.00 level. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is negative but is poised to turn positive. The MACD is above to generate a crossover buy signal.

The trajectory of the MACD histogram is in the negative territory but decelerating, which reflects a potential change in the trend in price movement.