Silver Prices Slipped as US Yields Climb Higher

Key Insights

• Silver prices dipped roughly 2% as yields jumped ahead of the $50 billion sale later
• The dollar climbed as gold prices fell 
• The 5s-30s yield curve inverted, spurring recession fears
• Oil prices slid amid demand fears due to the Shanghai lockdown

Silver prices slide on Monday as US benchmark yields continue to climb ahead of the $50 billion sale today. The 5s-30s yield curve inverted for the first time since 2006, sparking fears of a potential recession. The dollar rose as gold fell over 1%. Oil prices sharply fell 8$ as Shanghai began its four-day lockdown, generating concerns about demand as China is the world’s largest oil importer.

In February, the advanced trade good balance shrunk to %106.6 billion from $107.6 billion in January. The consensus was a trade gap of $106.0 billion. Exports led to the improvement. A 1.2% gain in exports was driven by consumer goods (food, beverages, feed) and industrial supplies. Imports slightly rose by 0.3%, after a revised increase of 1.8% in the previous month.  

Technical Analysis

Silver prices fall nearly 2% on the heels of Friday’s Doji. Silver faces downward pressure toward the 50-day moving average, and further weakness could lead to a drop to the 200-day moving average. The $26.00 threshold will be a test, but bullish prices are likely capped off.

Support is near the 50-day moving average near 24.28. Resistance is seen near the downward sloping trendline near 25.7. Short-term momentum is negative as the fast stochastic generated a crossover sell 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.