Silver Prices Traded Flat Amid Rising Yields and Strengthening Dollar

Key Insights

• Silver prices remained little changed amid rising inflation and rate tightening.
• The dollar reached 2-year highs.
• Benchmark yields surge as investors continue to digest FOMC meeting minutes.

Silver prices traded in a tight range due to mounting inflation and aggressive interest rate policy. Benchmark yields rose several basis points. The 10-year yield rose to 2.7%, the highest level since March 2019. Gold and silver prices traded flat as rate tightening dulls their appeal. 

The dollar extended gains, which were underpinned by the Fed’s aggressive tightening. Oil prices fell for the second week in a row on members states of the International Energy Agency (IEA) plan to release reserves over the next six months.

Wholesale inventories, the stock of unsold goods by wholesalers, were revised higher in February. Wholesale inventories rose 2.5% in February compared to 2.1%, which was reported the previous month. Inventories did not boost GDP in the first quarter since they did not increase faster than in the fourth quarter.  

Technical Analysis

Silver prices remained little changed, trading up 0.5% near the 24.7 level. Silver prices face downward selling pressure as the US dollar and yields strengthen. Support is seen near the horizontal trendline near 23.6. Resistance is near the $26.00 level. Short-term momentum is negative but has positive momentum.

The fast stochastic had a crossover sell signal. The medium-term momentum is positive as the histogram prints positively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is in positive territory but decelerating, which reflects the downward price movement.