Silver Price Prediction: Despite higher rates and a stronger currency, silver prices will increase

Despite an increase in the currency and rates, silver prices surged. Higher yields raise the opportunity cost of keeping gold and strengthen the currency, causing gold prices to decline.

Even with growing inflation, gold is unlikely to be a hedge if the Fed does not take the necessary steps to combat runaway inflation. The currency strengthened when rates increased.

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As investors continue to focus on Fed rate rises and intensifying pricing pressures, benchmark rates increase. The ten-year yield decreased by 8.2 basis points to reach 2.928%. Despite the EU prohibition on Russian oil and the lifting of limitations on the Shanghai shutdown, oil prices continued to rise.

The Job Openings and Labor Turnover Survey (JOLTS) data for April indicated 5,46 million job openings, a decrease of 455,000 from the previous month. Reduced the disparity between job vacancies and available workers.

Despite the narrowing of the difference, the result implies a tight labor market in which labor supply and demand are in equilibrium.

Today also saw the release of the ISM Manufacturing Index, which indicated that employers want to reduce the rate at which they hire new staff. The employment figure came in at 49.6, marking the first reading below 50 since November 2020. Relative to the labor supply, hiring will decrease.

These numbers are released two days before the May nonfarm payroll report. Economists anticipate an increase of 328,000 jobs from the previous month and a decline in the unemployment rate to 3.5%.

Technical Evaluation

Despite a bearish tendency, silver prices attempt to test the 10-day moving average near $21.9. As increasing inflation has become a greater concern for economists, the Fed intends to take whatever measures are necessary to curb inflation.

This circumstance will exert additional downward pressure on silver prices coming forward. The 50-day moving average continues below the 200-day moving average, representing a headwind for XAG/USD and indicating negative trend. Silver will likely reach the level of 20.4.

Resistance is seen around prior support at the 10-day moving average of 21.9. Support is seen close to the lows of the 13th of May near 20,4. As a result of the crossing purchase signal generated by the fast stochastic, short-term momentum turns positive.

The medium-term momentum turns positive when the histogram and MACD both show positive values (moving average convergence divergence). The MACD histogram is moving in negative area, indicating a downward trend in price movement.