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

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.