Silver Price Forecast – Prices rise despite higher government bond yields

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The silver price fluctuated and tried to move up but failed and ended up giving down. The dollar bounced back from the daily lows, reversing the precious metals price. Since most precious metals are valued in dollars, a stronger greenback usually translates into lower silver prices. Returns were mixed, with 2-year US Treasury bond yields continuing to rise while US 10-year Treasury bond yields fell. More robust than expected Markit PMI numbers helped boost the 2-year return that weighed on the price of silver.

Technical analysis

The silver price tried to rise, but failed and leveled off almost unchanged at the closing price. Support near the 10-day moving average at 23.46. Resistance is seen near the September highs at 24.82. The 10-day moving average has exceeded the 50-day moving average, which means that there is a short-term upward trend. The short term momentum turned negative as the fast stochastics generated a crossover sell signal. The medium-term momentum has turned positive as the MACD (Moving Average Convergence Divergenence) index generated a crossover buy signal. This happens when the MACD line (the 12-day moving average minus the 26-day moving average) crosses the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram prints in the positive area with a flattening path that indicates consolidation.

PMI surveys were mixed

The first flash of October’s purchasing managers survey showed increased business activity. Markit reported Friday that the US Composite Output Index rose to 57.3 from 55.0 in September, compared to expectations of 54.7. 3 month high. The Flash US Services Business Activity Index rose to 58.2 from 54.9 in September. A measured value of 55.1 was expected. 3 month high. Flash US Manufacturing PMI at 59.2 up from 60.7 in September. The Flash US Manufacturing Output Index was a 15-month low at 52.3.

This article was originally published on FX Empire

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