Silver Tests Resistance At $25.30 As Treasury Yields Pull Back From Highs

Key Insights

• U.S. inflation reports were mostly in line with analyst expectations, pushing Treasury yields lower.
• Lower yields and weaker dollar provided support to silver. 
• A successful test of the resistance at $25.30 will open the way to the test of the next resistance level at $25.60.

Silver ETF Gains Ground At The Start Of The Trading Session

Silver continues its attempts to settle above the resistance level at $25.30, while the U.S. dollar is losing some ground against a broad basket of currencies. Meanwhile, iShares Silver Trust is trading near the $23.30 level.

The U.S. Dollar Index moved back below the 100 level after U.S. inflation reports indicated that Inflation Rate increased by 8.5% year-over-year in March, compared to analyst consensus of 8.4%. Core Inflation Rate grew by 6.5%, compared to analyst consensus of 6.6%.

The reports were mostly in line with analyst expectations, while markets expected that inflation data would be even more scary. As a result, the U.S. dollar moved lower, while Treasury yields declined, which was bullish for silver and gold price today.

Gold  has recently managed to settle above the resistance at $1965 and is testing the next resistance level at $1975, while SPDR Gold Shares ETF moved towards $183.50. In case gold settles above $1975, it will gain additional upside momentum and head towards the psychologically important $2000 level, which will be bullish for silver.

Gold/silver ratio remains stuck near the 50 EMA at 77.90. In case gold/silver ratio manages to settle back above this level, it will head towards the resistance at 78.50, which will be bearish for silver.

Technical Analysis

Silver is trying to settle above the resistance at $25.30. In case this attempt is successful, silver will move towards the next resistance at $25.60.

A move above the resistance at $25.60 will push silver towards the next resistance at $25.80. If silver manages to settle above this level, it will head towards the next resistance level, which is located at $26.00.

On the support side, the nearest support level for silver is located at $25.10. If silver settles below this level, it will move towards the 20 EMA at $24.90. A successful test of the support at $24.90 will open the way to the test of the next support level at $24.70.

For a look at all of today’s economic events, check out our economic calendar.