Silver has broken below the support zone of $25 per ounce, declining below $24.5. This fall is mostly linked to the increase in U.S. yields, with the 1-year bond yield now at 1.75%, while the 2-year yield is above the 2.50% threshold.
On top of this, the US 10-year yields just hit their highest levels since April 2019. The greenback gained momentum, lifted by the Fed’s warning over the need for a prompt reduction in its balance sheet.
This is another negative factor for commodities, which are usually priced in the U.S. Dollar.
Both gold and energy-related commodities lost ground yesterday. Even so, both WTI and Brent remained positive YTD by over 30%. In this context, silver – after recovering once again to the key level of $25 - fell below $24.5 just after Fed member Lael Brainard's hawkish comments.
Overall silver is underperforming in comparison to gold. The ratio between the two main precious metals is now above 79 (to buy one ounce of gold, 79 ounces of silver are needed).
From a technical point of view, there is a first support zone at $24, while a clear return above the resistances placed at $25 and $25.2 would make space for new recoveries.
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He also writes as a technical analyst for the Italian newspaper La Stampa.
Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a commentator for CNBC Italy. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a book on gold and the gold market, followed by a new updated edition in 2018.
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