Silver Prices Slide as Fed Raise Rates

Key Insights

• Silver prices moved lower.
• Treasury yields consolidated following the Fed Meeting.
• Gold prices rebounded slightly.

Silver prices continued to trend lower on Wednesday in the wake of the Fed meeting. The dollar moved sideways. The Federal Reserve announced that it was increasing Fed Fund rates by 50-basis points, raising the borrowing rate between banks to 75-100 basis points.

Rate hikes will be ongoing where appropriate. The Fed will begin to reduce its balance sheet on June 1. The move was expected and is considered quantitative tightening.

The Federal Reserve will first lead the balance sheet run-off by 47 billion and then by 95 billion in three months. Household and business spending remain strong. The invasion of Ukraine likely weighed on economic activity. The Fed said that the lockdowns in China would likely lead to additional supply chain disruptions.

Technical Analysis

Silver prices restarted its trend lower on Wednesday. Support is seen near the February 2022 lows near $22.00. Resistance is seen near the 200-day moving average of 23.77.

Prices are oversold as the fast stochastic prints a read of 10 below the oversold trigger level of 20. The RSI is printing a reading of 26, below the oversold trigger level of 30.

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.