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The preliminary reading of the Eurozone consumer confidence index for July will be released in ten minutes.Gold prices fell more than 2% on Thursday, July 23, as Middle East conflict pushed up energy prices, exacerbated inflation concerns, and reinforced expectations of a US interest rate hike this year. Jim Wyckoff, market analyst at American Gold Exchange, said, "Rising oil prices are pushing up bond yields because people believe the Fed will be unable to lower interest rates due to inflation concerns. The market expects no change in Fed rates next week, perhaps only more hawkish comments. But if the Fed unexpectedly takes a dovish or hawkish stance, the market will react."Interest Rate Decision: 1. Interest Rate Level: The ECB kept its three key interest rates unchanged, in line with market expectations, leaving room for a rate hike in September. 2. Interest Rate Path: No pre-commitment was made to a specific interest rate path; the ECB will adopt a data-driven, meeting-by-meeting decision-making approach. 3. Middle East Conflict: The inflationary impact of a full-blown energy shock has not yet materialized; the ECB is closely monitoring the intensity and duration of the shock. 4. Inflation Expectations: The energy price outlook "remains close to the baseline scenario projected in June," and the ECB remains well-positioned to respond to energy price shocks. 5. Market Reaction: Traders bets on the ECB remained stable, with expectations of a 48 basis point rate hike by the end of the year; a September rate hike is almost a certainty. Lagarde Press Conference: 1. Interest Rate Path: A member asked whether we should consider raising interest rates. There is no pressure to raise rates today. No forward guidance is provided. 2. Inflation Outlook: Inflation risks are skewed to the upside. Energy inflation could cause inflation to be well above target in the first half of 2027, but inflation is expected to begin to slow after the first half of 2027. 3. Economic Outlook: The growth outlook faces downside risks. Economic growth will remain moderate in the short term, while the fundamental drivers of growth will remain solid in the medium term. 4. Middle East conflict: Conflict is the main source of uncertainty. The energy shock could intensify further, and its impact on other prices and wages may be more significant than currently expected.American Airlines (AAL.O) fell more than 7%, hitting a six-week low, as the company projected a loss for the third quarter, whereas the market had expected a profit.QumulusAI has signed a two-year, $32 million deal with NVIDIA (NVDA.O) Blackwell B300 provider.

Silver Prices Continue to Fall as the Dollar and Government Bond Yields Strengthen

Daniel Rogers

Apr 29, 2022 10:03

Silver prices fell as a result of the impending rate hike and a strong dollar. Dollar reached two-decade highs. Treasury yields increased as unexpected economic data indicated a slowing economy. The yield on the 10-year Treasury note increased 4 basis points to 2.85 percent.

 

Gold prices fell to two-month lows as the dollar strengthened, but recovered marginally later in the trading session. Oil prices stabilized Thursday morning following tumultuous trading, as investors absorbed the tightening of Russian oil supplies and the possibility of Chinese demand decreasing. A higher currency erodes the value of oil.

 

US Gross Domestic Product (GDP) unexpectedly dropped by 1.4 percent in Q1. Analysts anticipated a 1% increase in GDP. GDP is a three-month period measure of the output of goods and services in the United States. While consumer spending climbed by 2.7%, prices increased by 7.8%.

 

Increases in prices offset the increase in spending. The GDP data reflects the uncertain economic outlook created by the Fed's rate rise cycle. While the figures do not indicate a recession, they do indicate weaker economic growth in the future.

Technical Evaluation

Silver prices have continued to fall below the 23.00 mark, reaching a two-month low of 23.20 in today's trading session. The prospect of a Federal Reserve rate hike has boosted rates and the dollar. Silver is now under downward pressure as a result of this predicament. The commodity may test February 2022 lows near the $22 level in early February.

 

Near the November 2021 lows near $23.00, there is support. Resistance is indicated near the 200-day moving average's old support level of 23.83. The short-term momentum is going positive, maybe due to a crossover buy signal from the fast stochastic.

 

The medium-term momentum has shifted to the downside, as evidenced by the histogram's negative correlation with the MACD (moving average convergence divergence). The MACD histogram's trajectory is negative, indicating a downward trend in price movement.

 

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