- A positive market mood, falling US bond yields, and a weaker buck, a tailwind for precious metals and commodities.
- Hotter than expected, US PPI inflation reinforces a 50-bps increase by the Fed.
- Silver Price Forecast (XAG/USD): Remains upward biased, and a daily close above $25.85 would open the door for bulls towards $26.00
Silver (XAG/USD) rallies for the sixth consecutive day, in the middle of an upbeat market mood, taking advantage of fallings US Treasury yields, high US inflation figures, and despite the continuation of hostilities between Ukraine-Russia. At the time of writing, XAG/USD is trading at $25.72 and continues to aim towards $26.00.
Risk appetite increased throughout the North American session, as portrayed by US equities gaining. US Treasury yields fell, with the 10-year clinging to the 2.70% threshold, while the greenback fell.
High US inflation lays the ground for a Federal Reserve 50 bps hike
The ongoing week US economic docket keeps traders entertained. On Wednesday, consumer inflation rose to 8.5% y/y, higher than estimations but within the range. At the same time, the so-called core Consumer Price Index (CPI) increased 6.5% y/y, though lower than the 6.7% expected, a signal that inflation might be about to peak.
Nevertheless, prices paid for producers sent the hopes over the board on Thursday. The Producer Price Index (PPI) expanded by 11.2%, higher than the 10.8% y/y estimations, while core PPI hit 9.2% y/y, substantially up than the 8.4% estimations.
With both reports in the rearview mirror reinforces pressure on the Federal Reserve to raise rates at a faster pace. Fed officials have opened the door for 50-bps rate hikes at its May meeting, while STIRs shows a 94% chance of a 0.50% lift to the Federal Funds Rate (FFR).
Elsewhere precious metals extend their gains in the week. Silver is up close to 4%, while Gold gains 1.5%, trading at $1976 a troy ounce.
The US economic docket would unveil Retail Sales, Initial Jobless Claims, and the University of Michigan Consumer Sentiment survey by Thursday.
Silver Price Forecast (XAG/USD): Technical outlook
Silver’s (XAG/USD) daily chart depicts the pair as upward biased. The daily moving averages (DMAs) below the spot price confirmed the previously mentioned, though it’s worth noting that the 200-DMA at $23.89 is trapped between the 50-DMA at $24.61 and the 100-DMA at $23.74.
Silver’s 1-hour chart bias is aligned with the daily chart, and the uptrend is intact. The price action of the last two candlesticks shows that the rally is overextended, further confirmed by the Relative Strength Index (RSI) at 61.63, close to reaching overbought conditions.
Upwards, the XAG/USD first resistance would be the confluence of the March 24 cycle high and the R1 pivot point around the $25.75-85 range. A breach of the latter would expose the psychological $26.00 mark, followed by the R3 pivot at $26.43.
On the downside, the XAG/USD first support would be the 50-hour simple moving average (SMA) at $25.37. Once cleared, the next support would be the confluence of March 31 and the 100-hour SMA around the $25.05-09 range, followed by the 200-hour SMA at $24.78.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.