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ECB President Christine Lagarde: I am confident that the practice of basing policy on data should be maintained.European Central Bank President Christine Lagarde: We have not seen artificial intelligence causing redundancy in the labor market.European Central Bank President Christine Lagarde: We are monitoring exchange rates, not setting exchange rate targets.On February 26th, European Central Bank (ECB) President Christine Lagarde reiterated that the ECB has successfully controlled consumer prices, but cautioned that policymakers must closely monitor perceived high inflation. She stated, "Officials will achieve the 2% growth target in the medium term. However, despite the decline in inflation, surveys show that many people still feel prices are rising faster than official data suggests." While ECB policymakers emphasized that their next interest rate adjustment will have "full flexibility," they have not indicated any intention to make any adjustments in the near term. They expect inflation to stabilize at the 2% target level in the medium term, with economic growth accelerating. However, some believe there is a possibility of inflation remaining below target for an extended period. According to the latest consumer expectations survey, perceived inflation is higher than actual data suggests. This could negatively impact private consumption and lead to higher wage demands, making the central banks task of maintaining price stability and promoting economic growth even more challenging.Gold prices fell slightly in early trading on February 26, but remained above $5,100 an ounce as investors focused on progress in US-Iran negotiations. New York gold futures edged lower as investors worried that US interest rates might remain unchanged for some time, limiting gains. However, prices still rose more than 3.5% this week, benefiting from uncertainty surrounding US trade policy and ongoing geopolitical tensions with Iran. "Any escalation of tensions involving Iran could provide further support for gold and strengthen its role as a hedge against shocks," said analysts at ING. "Meanwhile, the structural drivers behind golds previous gains remain solid."

Silver Prices Continue to Fall as the Dollar and Government Bond Yields Strengthen

Daniel Rogers

Apr 29, 2022 10:03

Silver prices fell as a result of the impending rate hike and a strong dollar. Dollar reached two-decade highs. Treasury yields increased as unexpected economic data indicated a slowing economy. The yield on the 10-year Treasury note increased 4 basis points to 2.85 percent.

 

Gold prices fell to two-month lows as the dollar strengthened, but recovered marginally later in the trading session. Oil prices stabilized Thursday morning following tumultuous trading, as investors absorbed the tightening of Russian oil supplies and the possibility of Chinese demand decreasing. A higher currency erodes the value of oil.

 

US Gross Domestic Product (GDP) unexpectedly dropped by 1.4 percent in Q1. Analysts anticipated a 1% increase in GDP. GDP is a three-month period measure of the output of goods and services in the United States. While consumer spending climbed by 2.7%, prices increased by 7.8%.

 

Increases in prices offset the increase in spending. The GDP data reflects the uncertain economic outlook created by the Fed's rate rise cycle. While the figures do not indicate a recession, they do indicate weaker economic growth in the future.

Technical Evaluation

Silver prices have continued to fall below the 23.00 mark, reaching a two-month low of 23.20 in today's trading session. The prospect of a Federal Reserve rate hike has boosted rates and the dollar. Silver is now under downward pressure as a result of this predicament. The commodity may test February 2022 lows near the $22 level in early February.

 

Near the November 2021 lows near $23.00, there is support. Resistance is indicated near the 200-day moving average's old support level of 23.83. The short-term momentum is going positive, maybe due to a crossover buy signal from the fast stochastic.

 

The medium-term momentum has shifted to the downside, as evidenced by the histogram's negative correlation with the MACD (moving average convergence divergence). The MACD histogram's trajectory is negative, indicating a downward trend in price movement.

 

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