Silver Rebounds and Forms Beginning of Bull Flag Pattern

Key Insights

• Silver prices edged higher
• The Dollar bounced slightly
• The U.S., Treasury yields continue to break out
• Gold Inched higher

Silver prices rebounded from Wednesday’s selloff. Geopolitical pressures remain, and commodity prices are likely to experience further upward pressure. Jobs data in the U.S. was slightly softer than expected, while consumer prices hit a 40-year high.

Initial jobless claims for the week ended March 5 rose to 227,000 versus 217,000 expected and an upwardly revised 216,000 during the prior week. Continuing claims, the week ended February 26, came in at 1.494 million versus 1.450 million expected.

Technical Analysis

Silver prices edged higher rebounding after Wednesday’s drop. The pattern could be a consolidation pattern that is a pause that refreshes higher. A new March high would confirm the breakout. The risk is to the upside. Support is near the 10-day moving average that comes in near $25.4. Resistance is seen near the March highs at 26.94. Short-term momentum is negative as the fast stochastic reversed and generating a sell signal falling out of the overbought territory.

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 flattening, which reflects the consolidation of the flag pattern.