Silver prices traded flat as Ukraine has concerns about Hawkish Fed policy

Important Findings

• Silver prices have held steady despite mounting inflation concerns
• Dollar strengthens after Fed minutes release
• Benchmark yields fell after rising for the week
• Oil prices plummet as US and EIA members pledge to release strategic reserves

Silver Prices was traded sideways as rising inflation worries increased safe haven demand. Benchmark yields fell today after edging higher as the Fed announced plans to aggressively tighten monetary policy. The 10-year yield hits its highest level since March 2019 at 2.67%. Gold and silver prices rose as fears of rising inflation have fueled increased demand for safe haven assets. The inflation situation thwarts the Fed’s policy of increasing interest rates. Oil prices fell as EIA member states announced plans to release more strategic reserves. It’s the biggest release since the supply’s creation in 1980. Analysts have differed opinions on how much the release of the supply will affect market tension.

Jobless claims fell 5,000 to 166,000 last week. That number, the lowest since 1968, signals just how tight the job market tightened last week. The Dow Jones estimate was 200,000. The labor market suffers from a severe labor shortage. The increasing demand for labor has led to rising wages and rising inflation.

Technical Analysis

Silver prices remained little changed near the 24.6 level as focus remains on new sanctions against Russia underpinning XAG/USD. However, due to rising yields and a firmer dollar, silver could face downside pressure to the $24.00 level. Bulls could aim for silver to break through $25 and add further momentum. Support is seen near the horizontal trendline at 23.6. Resistance is near the $26.00 level. Short-term momentum turned negative as the fast stochastic had a crossover sell signal.

Medium-term momentum is positive as the MACD (Moving Average Convergence Divergence) histogram prints positive. The MACD-Histogram trajectory is in the positive territory but is slowing down, reflecting the downtrend of the price action.