Silver Prices Slipped as the Dollar Scaled a Two-Decade High

  • Commodities Analysis

Silver yesterday settled down by -1.68% at 61497 as the dollar scaled a two-decade high and yields on ten-year benchmark debt hit 3.18 percent for the first time since Nov 2018 as investors priced in the prospect of aggressive policy tightening by global central banks. Germany's 10-year bond yield hit a new highest level since 2014 after hawkish policymaker Robert Holzmann said that the ECB should hike interest rates three times this year to combat inflation. Fed Chair Jerome Powell said last week that a 75-bps rate hike is not under active consideration. However, market participants seem convinced that the U.S. central bank would need to take a more drastic action to curb soaring inflation, with a further 200 bps of hikes priced in for the rest of 2022.  
 
The U.S. Federal Reserve can stick to half-point interest rate hikes for the next two to three meetings and then assess how the economy and inflation are responding before deciding whether further rises are needed, the Atlanta Fed president said. The half-point increase approved by the Fed last week "is already a pretty aggressive move. I don't think we need to be moving even more aggressively," Raphael Bostic said in comments that appear to rule out a larger three-quarter point hike. 
 
Technically market is under fresh selling as the market has witnessed a gain in open interest by 9.99% to settle at 16149 while prices down -1051 rupees, now Silver is getting support at 60891 and below same could see a test of 60284 levels, and resistance is now likely to be seen at 62377, a move above could see prices testing 63256. 

Trading Ideas:
# Silver trading range for the day is 60284-63256.
# Silver prices slipped as the dollar scaled a two-decade high and yields on ten-year benchmark debt hit 3.18 percent
# Investors priced in the prospect of aggressive policy tightening by global central banks
# ECB hawkish policymaker Robert Holzmann said that the ECB should hike interest rates three times this year to combat inflation.

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