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The silver price rebounded slightly but did not gain traction like gold. The dollar’s slide failed to boost prices, which appear to be forming a topping pattern. Instead, strong US yields have boosted the greenback and paved the way for lower gold prices. Silver has also felt the downward pressure from falling copper prices, which has also created headwinds for silver. Fed regional banks’ US growth prospects remain robust, which should put further pressure on yields and make precious metals difficult to gain a foothold.
Technical analysis
Silver rose on Monday but failed to gain traction before support near an upward sloping trendline at 25.25. Resistance is seen near the 50-day moving average at 27.04. The 10-day moving average is expected to fall below the 50-day moving average, which means that it is on a downtrend. The short-term momentum has turned positive as the fast stochastics generated a crossover buy signal. The fast stochastic also prints a value of 15, below the oversold trigger level of 20, which anticipates a correction. The RSI has risen slightly but has never broken the oversold trigger level of 30. Medium-term momentum is negative as the Moving Average Convergence Divergenence (MACD) histogram prints with a bearish trend in the red, indicating lower prices.
US growth forecast remains strong
U.S. growth forecasts for the second quarter of 2021 remain strong. According to the Atlanta Fed’s GDPNow model, Q2 growth is forecasting 10.3% previously 10.5%, the New York Fed’s nowcast model currently shows a more modest 3.7% growth in the 2nd quarter versus 4.2% . While weaker-than-expected US retail sales weighed on growth forecasts, those numbers are still strong and are likely to further boost US yields.
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