Price Prediction for Silver - Silver Prices Face Downward Pressure Due to a More Hawkish Federal Reserve

Due to a stronger currency and more aggressive Fed monetary policies, silver prices are expected to decline. The dollar rises to levels not seen in two decades as investors put dollar-bearing wagers. As investors flocked into bonds in response to the sell-off in equities, benchmark rates lost ground.

The Dow Jones and Nasdaq had significant daily drops as inflation fears increased in response to earnings announcements. Today, the yield on ten-year bonds fell by 9 basis points. Oil prices decrease as US corporations expect to expand output, mitigating the impact of the Russian oil embargo on supply concerns.

In April, house starts decreased by 0.2% due to higher mortgage rates. The 30-year loan rate rose to 5.3% last week, up from 2.94 percent a year ago. Inflationary spirals and high material costs have weighed on the housing market.

Harker, president of the Philadelphia Fed, predicted that the Fed will implement two 50-basis-point rate hikes in June and July during FOMC meetings.

Technical Evaluation

Despite a risk-averse mindset, silver prices could not surpass $21.50. Prices stay above the critical $21 threshold. However, XAG/USD faces a gloomy outlook due to Fed rate hike predictions.

There is support near the $21.00 level. A breach of this level would reduce support to the low from May 16 of 20.84. Near the 10-day moving average near the 10-day moving average of 21.49, there is observed resistance.

Momentum on the short term may turn positive as the fast stochastic may generate a crossover buy signal.

The medium-term momentum turns bullish as the MACD histogram becomes less adversely skewed (moving average convergence divergence). The MACD histogram is moving in a positive direction, indicating an upward trend in price movement.