Silver Prices Rally on the Back of Hot Inflation Data and Uncertainty in Ukraine

Tips 

• Silver prices continue their upward trajectory as a hedge against inflation.

• Benchmark yields fell as investors rallied in anticipation of a possible inflation peak.

• Oil prices increased when China's shutdown restrictions were eased.

Silver prices increased for the fifth straight day on the back of stronger-than-expected inflation statistics. Benchmark yields fell following the announcement of the fresh data. The market has priced in hawkish Fed policies, restricting the dollar's gains.

March's CPI increased by 8.5 percent year over year, the largest yearly increase since 1981. The figure was slightly higher than the Dow Jones forecast of 8.4%. Core inflation, on the other hand, increased 6.5 percent year over year, excluding food and energy. Core PCI increased by 0.3 percent, less than the forecasted 0.5 percent increase.

Despite this, actual wages continue to fall behind the cost of living. This could exacerbate inflationary pressures. The report is essential in determining how aggressively the Fed will raise interest rates and end its bond-buying program.

Technical Evaluation

Silver prices rose 1.2 percent Monday, confirming the precious metal's ascent. Silver prices are under pressure to fall as the US dollar and rates rise. Near $24.76 is a level of support. 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.