Silver Prices Dropped As the Dollar and Yields Were Under Pressure

Significant Insights 

• Silver prices have remained quite stable.

• The dollar has depreciated, losing its safe-haven status.

• Yields declined as employment statistics indicated increased inflation fears.

• Oil prices fell sharply in the aftermath of promising peace talks.

Silver prices were largely unchanged on Wednesday, finishing in the green. The GPD suggested an increase in economic growth of 7.1 percent, which bulls did not find impressive. Benchmark yields fell as bond spreads narrowed. Tuesday saw the end of the 5s-30s inversion. The inversion highlighted the prospect of a recession as a result of the Fed's interest rate hikes. Gold prices increased as the currency and Treasury yields fell. The dollar sank as the currency's safe-haven attraction waned and the Euro strengthened. Oil prices have risen as the US weighs more sanctions against Russia in areas critical to the country's invasion of Ukraine.

According to ADP's Private Payroll Report, private payrolls increased by 455,000 in March, above expectations. In March, economists predicted that 450,000 additional jobs would be generated. The preceding month's total was 486,000. The leisure and hospitality sectors added the most jobs, 161,000 in total. Despite a tighter labor market exacerbated by the Fed's aggressive stance, hiring remains healthy. This report comes just two days before the highly anticipated nonfarm payrolls report, which indicates job growth.

Technical analysis

Silver prices reached a high of almost $25.00, tested the 10-day moving average, and then fell to $24.80. While silver is now trading higher, the Russia-Ukraine peace talks indicate a downward trend. Critical US data and diminishing geopolitical uncertainties will cause the metal to fall. Additional weakness might result in a test of the 200-day moving average. The $26.00 level will be a litmus test, although bull prices are very certainly capped.

Support is located near the 50-day moving average at approximately 24.32. Near the downward sloping trendline near 25.7, resistance is seen. The short-term momentum went positive as a crossover buy signal was triggered by the fast stochastic.

The medium-term momentum is negative, as indicated by the histogram's negative correlation with the MACD (moving average convergence divergence). The MACD histogram's trajectory is negative but decelerating, indicating an upward trend in price movement.