Silver Prices Move Higher as Yields Surge

Silver prices rally following last week’s stronger-than-expected CPI report. The US benchmark ten-year yield moved higher to over five basis points to 2.003% in the wake of a surging inflation reading last week. Gold prices eased ahead of concerns over geopolitical tensions between Russia and Ukraine. The dollar made substantial gains hitting a two-week high as the safe-haven asset became less attractive.

Technical Analysis

On Monday,  silver prices rose for the second consecutive trading session. Support is seen near the 10-day moving average at 23.54. Resistance is seen near the 200-day moving average at 24.37. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. The fast stochastic is printing a reading of 90.55, triggering the overbought signal. Medium-term momentum is positive as MACD (moving average convergence divergence) index had a crossover buy signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses over the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram prints in positive territory with an upward sloping trajectory, pointing toward higher prices.

Fed’s Bullard Argues for Aggressive Monetary Policy

St. Louis Fed President James Bullard reiterated his stance that the Fed should take aggressive action to fight mounting inflation. He argued that the Fed should “front-load” its tightening monetary policy. He stated he favors a 100 bp increase in the next three meetings, and he wants to unwind the balance sheet. Markets now price in seven rate hikes this year following his hawkish position.