Silver Prices Continue to Fall as the Dollar and Treasury Yields Extend Their Gains

Silver prices fell Wednesday as the currency and benchmark rates gained in the face of mounting inflation fears. The ten-year yield hit its highest level since 2018 near 2.93 percent Thursday, owing to a bond sell-off triggered by rising inflation. This circumstance has boosted yields.

Gold prices declined as the dollar rose in anticipation of additional Federal Reserve rate hikes to tackle soaring inflation. Oil prices fell in erratic trading despite an ongoing global supply constraint, as the IMF raised inflation concerns and lowered economic growth predictions.

Housing starts unexpectedly increased by 0.3% in March to 1.793 million seasonally adjusted units. Last month, building permits increased by 0.4 percent to 1.873 units on an annual basis.

Increased mortgage rates and supply chain delays are making it more difficult for buyers to purchase a home. However, the lack of available homes will continue to support housing starts this year.

Technical Evaluation

Silver prices gave back their gains from yesterday, falling to the low $25s. Silver prices are reverting lower despite increased inflation and global supply constraints caused by the Russia-Ukraine conflict. This could be a temporary reversal brought either by investors buying the dip or a change to negative momentum.

Support is located near the $24.85 50-day moving average. Near the $26.40 level, resistance is located. Short-term momentum shifted negative as the fast stochastic crossed below the zero line, signaling a sell signal.

The medium-term momentum is good, but the histogram prints favorably with the MACD (moving average convergence divergence). The MACD histogram is in positive territory but is trending downward, reflecting the downward trend in price movement.