Silver prices fell 1.4% after ending the week lower. The dollar rose as yields on short-term U.S. Treasuries surged following President Biden’s decision to reappoint Fed Chairman Powell. Strong gains in the greenback put downward pressure on the entire precious metals complex. Gold prices also fell, weighing on silver.
Silver prices have moved lower and are about to test target support near an ascending trendline near 23.95. Further support is seen near the 50 day moving average at 23.54. Resistance is near the 10 day moving average at 24.82. Medium term momentum turned negative as the MACD (Moving Average Convergence Divergence Index) generated a cross sell signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line. Short-term momentum. is also negative as the Stochastic has recently generated a cross sell signal.
Biden renames Powell
President Biden has announced that he will reappoint Jerome Powell as chairman of the Fed and appoint Lael Brainard as vice chairman of the Federal Reserve. The continuity offered by the new appointment of Jerome Powell, a Republican appointed by former President Trump, has been welcomed by market participants. Yields rose because many believe Powell will be more aggressive with interest rate hikes than Brainard, the other potential candidate for the Fed’s chairmanship. Currently, markets have valued the Fed’s first rate hike in July 2022.