Silver prices traded lower as inflation data supports aggressive rate tightening.
Treasury yields soared after the market faced immense selling pressure this week.
Oil prices rose on Friday but traded lower for the week as global demand concerns outweighed lingering supply issues.
Silver prices gained positive momentum as the stock sell-off ended and yields rose. The dollar is rallying as investors predict more aggressive Fed rate tightening. Benchmark yields rose as investors moved out of bonds and into equities. The 10-year yield jumped 9 basis points today.
Gold prices fell as the dollar rallied on the prospect of more aggressive Fed rate tightening in the months ahead. Oil prices rose on Friday after volatile trading this week.
However, oil prices fell during the week on concerns over lockdowns in China and rising inflation. These factors offset supply concerns related to the potential Russian oil embargo.
The economic calendar remains light today. Fed Chairman Powell’s comments on the state of the economy remain relevant. Economists are debating whether the Fed plans to raise rates by 75 basis points or 50 basis points at the June and July meetings.
However, the main concern is that inflation will remain high even if the economy slows down. The latest CPI data made it clear that rising inflation is still a lingering concern. The market is looking for rate hikes of 50 basis points for June, July and probably September.
Silver prices edged higher to near the $21 mark after hitting a year-to-date low. However, XAG/USD faces a bearish outlook as the brief rally will likely run its course quickly.
The trend indicates bearish momentum favoring bearish traders. Gains will likely be capped at the $21.40 level. A sustained break above the $22 level could indicate a bigger upside.
Support is seen near the 2019 lows near the $19.60 region. Resistance is seen near the 10-day moving average near the 10-day moving average of 21.9. The short-term momentum is positive as the Fast Stochastic had a crossover buy signal.
The medium term momentum has turned negative as the histogram prints negatively with the MACD (Moving Average Convergence Divergence). The trajectory of the MACD the histogram is in negative territory, reflecting the downward trend in price movement.
This article originally appeared on FX Empire