Silver Prices Rally in Response to Additional Hot Inflation Data

Silver prices climbed for the sixth consecutive day, owing to the prolonged Russia-Ukraine crisis and rising inflation figures. Benchmark rates extended their increases as higher-than-expected inflation data offset rate hikes.

Oil prices continued to rise as Russia-Ukraine peace talks stalled. Increased oil reserves by EIA member nations will not compensate for Russia's supply reductions. A small relaxation of China's lockdown rules in response to the COVID-19 outbreak raised demand and supported higher oil prices.

The producer price index, which tracks changes in the prices producers pay, increased 11.2 percent year over year and 1.2 percent in March. The core PPI, which excludes food and energy, increased by 0.9% month on month.

Economists anticipated a 0.5 percent gain. Prices of final demand products increased the most, by 2.3 percent on a monthly basis. Services increased by 0.9 percent in March, up from 0.3 percent in February.

Increased producer and consumer costs suggest a market that is sliding into inflation. The Fed will continue to boost rates through increases this year, following a quarter-point increase in March.

Technical Evaluation

Silver prices are up on the day, confirming the precious metal's upward trend as a hedge against inflation. However, the precious metal faces further downside as the Fed's hardline members prepare to boost rates quickly. Support is located near the $24.83 ten-day moving average.

Resistance is located near the March 24th high, at approximately $25.845. A break to the upside would take us to the $26.00 level. The short-term momentum is bullish, as the fast stochastic generated a buy signal upon crossover.

As the histogram prints positively with the MACD, the medium-term momentum turns positive (moving average convergence divergence). The MACD histogram's trajectory is positive, indicating an upward trend in price movement.