Silver Retreats As Treasury Yields Keep Moving Higher
Silver managed to get below the support at $23.20 and is moving lower while the U.S. dollar is gaining some ground against a broad basket of currencies.
The U.S. Dollar Index has recently moved back to the 93 level. In case the U.S. Dollar Index gets above this level, it will head towards the resistance at 93.10 which will be bearish for silver and gold price today.
Gold made an attempt to settle above the resistance at $1750 but lost momentum and pulled back. Treasury yields moved higher after U.S. released Producer Prices data which indicated that Producer Prices grew by 7.8% year-over-year in July compared to analyst consensus of 7.3%. Bond traders remain worried about inflation and sell Treasuries, which pushes their yields higher and puts pressure on precious metals. If gold declines towards the nearest support level at $1720, silver will find itself under more pressure.
Gold/silver ratio is currently testing the 75 level. RSI for gold/silver ratio is in the overbought territory, but the current upside momentum remains strong, which is bearish for silver.
Silver has recently managed to get below the support level at $23.20 and is trying to develop additional downside momentum. The next support level for silver is located at $22.90.
If silver settles below $22.90, it will head towards the next support at $22.60. A successful test of the support at $22.60 will push silver towards the support at $22.35. If silver manages to settle below this level, it will head towards the support which is located at the recent lows at $22.10.
On the upside, a move above $22.20 will open the way to the test of the resistance at $23.50. This resistance level has already been tested several times in recent trading sessions and proved its strength. A move above $23.50 will push silver towards the resistance at $23.80. If silver gets above this level, it will continue its rebound and get to the test of the next resistance level at $24.00.
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This article was originally posted on FX Empire
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