Silver Prices Likely To Trade Firm
Abhishek Bansal | Apr 15, 2021 05:34AM ET
Silver prices are currently trading near $25.63, sharply higher from the recent low of $23.74 registered on Mar. 31. Weakness in the US dollar index is supporting a bullish move in silver prices.
The dollar index is currently trading near 91.54 which is sharply lower from a recent high of 93.47 registered on Mar. 31. Silver and gold prices also found support from weakness in bond yield. United States 10-year bond yield is currently trading near 1.617 which is sharply lower from the recent high of 1.776 registered on Mar. 30.
On the economic data front, US March import price index ex-petroleum rose +0.9% m/m, against expectations of +0.4% m/m which is the largest increase in 10 years. Eurozone February industrial production fell -1.0% m/m, against expectations of -1.3% m/m. Conversely, also Japan February core machine orders unexpectedly fell -8.5% m/m, against expectations of +2.5% m/m and the biggest decline in 10 months.
Hawkish central bank comments are likely to limit positive moves in gold and silver. Fed Chair Powell said the US economy "is entering a period of quicker economic expansion," but risks from a potential spike in COVID cases remain. Also, Dallas Fed President Kaplan said he sees a Fed rate lift-off sooner than median estimates and that it makes sense for 10-year T-note yields to drift up this year.
In addition, ECB Governing Council member Villeroy de Galhauaid said the ECB "could possibly exit the pandemic emergency purchase program by March 2022" while adapting its monetary policy tools to keep supporting the economy after the pandemic crisis.
The Fed's Beige Book, released Wednesday afternoon stated that "U.S. economic activity accelerated to a moderate pace from late February to early April," and most Fed districts were more optimistic mainly on COVID vaccines.
Rising COVID cases are supportive for precious metals prices which are increasing safe-haven demand. According to Johns Hopkins University (JHU), the total case count mounted to 138.27 million while the death tally from the virus reached 2.97 million on Thursday afternoon.
Silver prices are likely to trade firm while above the key support level of $25.297 and $24.775 while it may find stiff resistance near $26.020-$26.795
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