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On August 21, the Chongqing Municipal Peoples Government issued the "Chongqing Municipal 15th Five-Year Plan for the Construction of a Beautiful Chongqing (2026-2030)," which proposes to promote the low-carbon upgrading of transportation equipment. The plan calls for actively promoting new energy vehicles, advancing the electrification of public sector vehicles, and promoting the application of pure electric and hydrogen fuel cell commercial vehicles. It also calls for the construction of zero-carbon transportation corridors, establishing "zero-carbon corridors," implementing the scrapping and replacement of old operating vessels, and promoting new energy and clean energy-powered vessels. Furthermore, it aims to promote energy-saving and carbon-reducing retrofits of existing transportation infrastructure and construct a number of low-carbon stations, wharves, and highway service areas.Market news: Members of the SK Hynix South Korean labor union will vote on the provisional wages and labor agreement for 2026 from August 24 to 25.On August 21, analysts at Daiwa Capital Markets noted in a report that European Central Bank policymakers may have been somewhat relieved so far by the relatively limited indirect impact of the energy shock on other commodity prices. "Of course, the pressure is mainly concentrated in the early stages of the production chain and in industries most vulnerable to oil and gas prices," they stated. However, with wholesale oil and gas prices rising again in recent weeks, the risk of further exacerbation of the indirect transmission effect and a second round of price impacts lasting longer is also increasing.The Ukrainian border guard service said that Russian drones attacked a border crossing in Moldova last night.On August 21st, economists at Sumitomo Mitsui Nikko Securities stated that the Bank of Japan (BOJ) is likely to raise its policy rate from the current 1% to 1.25% at its next meeting in September. They noted that the BOJ is expected to raise rates again in January and June 2027, eventually reaching a policy rate of 1.75%. They added, "After next summer, import-driven inflationary pressures are expected to ease, making it unlikely that the BOJ will raise the policy rate to 2%—a level higher than the markets average estimate of the neutral rate." The overnight index swap market currently indicates an 84% probability of a BOJ rate hike in September, with two more hikes expected by early 2027.

Silver Prices Face Downward Pressure Due to Growing Concerns About Inflation and a New Sanction on Russia

Drake Hampton

Apr 07, 2022 10:30

Tips

  • Silver prices remained stable due to fears about rising inflation.

  • The dollar strengthens upon the publication of the Federal Reserve's minutes.

  • Benchmark rates have continued to rise at a faster rate than the rate of tightening.

  • Oil prices are falling as the US and EIA pledge to release critical stockpiles.

 

Silver prices fell marginally as concerns about inflation increased as a result of the Ukraine crisis. Benchmark yields increased in response to the Fed's hawkish tone and more active policy. The ten-year Treasury yield increased to 2.61 percent, approaching March 2019 highs. Due to growing risk-averse sentiment, new sanctions on Russia resulted in a surge in gold and silver prices. Oil prices declined 2.2% to $99.73 per barrel as the US committed to deploying 60 million barrels from strategic reserves while EIA members committed to release 120 million barrels. 180 million barrels in total would be released.

 

The March FOMC meeting minutes, released on Wednesday, showed that the Fed intends to begin shrinking the balance sheet by $95 billion per month in May. Treasury securities would be limited to a maximum of $60 billion and mortgage-backed securities to a maximum of $35 billion, which would be phased in over three months. Additionally, the discussion indicated that future meetings would likely include a 50-basis-point hike. Members favored more aggressive maneuvers. Additionally, the Fed raised its inflation forecast and decreased its economic growth forecast.

Technical Evaluation

Silver prices fell to $24.4 per ounce today as increasing inflation offsets negative pressure from aggressive rate hikes and a strengthening dollar. New sanctions against Russia may act as a tailwind due to silver's safe-haven characteristics. Silver is under pressure to fall to the $24.00 level as yields rise and the dollar strengthens. This circumstance may result in a breach below support for XAG/USD. Near the horizontal trendline near 23.6, there is support. Resistance is located near the 50-day moving average, which is located near 24.5. Short-term momentum shifted negative as the fast stochastic crossed below the zero line, signaling a sell signal.

 

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.

 

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