Silver Prices Whipsawed As Peace Talks Heightened Risk Appetite 

Key Insights

• Silver prices were volatile in trading
• The dollar faced downward pressure
• Yields fell as jobs data pointed toward increased inflation concerns
• Oil prices tumbled following positive-looking peace talks

Silver prices traded flat on Tuesday as Russia-Ukraine peace talks point toward progress. Benchmark yields decreased on jobs data signaling a torrid labor market and rising inflation. The dollar declined against a basket of major currencies today as Russia-Ukraine peace talks reduce the dollar’s safe-haven appeal and boost the Euro, which has been hit hard this month due to geopolitical conflict. There has been a rebound in risk appetite in the market due to the peace talks. Oil prices continued to move lower due to concerns about demand in China from the new lockdown. 

The JOLTS report stated that 4.4 million people quit their jobs in February, close to a record high. Job openings did not change much from the previous month at 11.4 million. Expectations were for 11.1 million openings. People are switching to jobs that offer higher pay. Since employers are looking for employees, wages increased by 4.5% in 2021. The data reaffirms the Fed’s hawkish stance. Fed Chair Powell has stated that the Fed aims to reduce the number of job openings available to lower inflation and wage increases. 

Technical Analysis

Silver prices had a volatile trading day, dropping below $24.00 but ending the trading session above $24.50. Silver prices moved lower due to the Russia-Ukraine peace talks. Silver faces downward pressure due to the Fed’s hawkish stance. Silver prices tested the 50-day moving average before retreating to higher levels. Further weakness could lead to a drop below the 200-day moving average. The $26.00 threshold will be a test, but bull prices are likely capped off.

Support is near the 50-day moving average near 24.30. Resistance is seen near the downward sloping trendline near 25.7. Short-term momentum turned positive as the fast stochastic generated a crossover buy 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.