Silver Prices Break Out Testing Key Resistance

Key Insights

• Silver prices broke out
• The Dollar whipsawed and ended the day lower
• U.S. yields moved higher as Energy Imports surged
• Gold continued to rise on Geopolitical risk

Silver prices broke out following gold higher. The war and how it is impacted the capital markets take center stage every day. If replaced by U.S. places, Poland has agreed to deliver its used fighter jets to Ukraine. Trade data released on Tuesday reflect higher import prices driven by energy. President Biden announced on Tuesday that the U.S. would halt taking Russian imported oil.

U.S. trade deficit hit a new record in January as energy imports while exports fell. Strong demand, which took foreign goods off the shelves of U.S. stores, drove imports to record levels. Inflation continues to rise ahead of the Fed’s central bank meeting next week.

Technical Analysis

Silver prices broke out but settled off the highs of the trading session. Support is near the 10-day moving average that comes in near $25.11. Resistance is seen near the July 2021 highs at 26.77. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. The RSI surged higher into overbought territory, reflecting accelerating positive momentum. The current reading on the RSI is 81, above the overbought trigger level of 70.

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 upward sloping, which likely points to upward prices.