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Silver Price Prediction – Prices Edge Higher from Oversold Territory

By:
David Becker
Updated: Jun 21, 2021, 17:02 UTC

GDP projections remain strong

Silver Price Prediction – Prices Edge Higher from Oversold Territory

Silver prices bounced slightly but failed to gain traction like gold. The slip in the dollar failed to buoy prices which appear to be forming a topping pattern. Instead, strong U.S. yields have helped buoy the greenback paving the way for lower gold prices. Silver has also felt the downward pressure of falling copper prices which have also created headwinds for silver. The U.S. growth outlook from the Fed regional banks remains robust, which should continue to put upward pressure on yields and make it difficult for precious metals to gain a toe hold.

Technical Analysis

Silver prices moved higher on Monday but failed to gain traction ahead of support near an upward sloping trend line that comes in near 25.25. Resistance is seen near the 50-day moving average at 27.04. The 10-day moving average is poised to cross below the 50-day moving average which means that a downward trend is in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The fast stochastic is also printing a reading of 15, below the oversold trigger level of 20 which foreshadows a correction. The RSI turned up slightly but never pushed through the oversold trigger level of 30. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a declining trajectory which points to lower prices.

q1

U.S. Growth Projection Remain Strong

The U.S. growth projections for the second quarter of 2021 remain strong.  According to the Atlanta Fed’s GDPNow model forecasts Q2 growth at 10.3% 10.5% previously, the New York Fed’s Nowcast model currently shows Q2 growth at a more modest 3.7% vs. 4.2%.   While the softer than expected U.S. retail sales weighed on growth projections, these numbers are still strong and will likely keep U.S. yields buoyed.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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