Silver Price Prediction – Prices Break Out but Prices are Overbought – FX Empire
Silver prices continued to break out, rallying sharply and poised to test higher levels. The dollar moved lower, closing near its lows for the session. A weaker dollar generally leads to gains in precious metals. Since silver is priced in U.S. dollars, a weaker dollar generally buoys silver prices. U.S. yields were mixed, with the 10-year yield rising while the 2-year yield pulled back. A rise in the building confidence helped buoy the long end of the treasury curve. Gold prices also rallied sharply, giving a bid to the entire precious metals complex.
Technical analysis
Silver prices broke out and rallied sharply breaking through trend line resistance near 24.17, which is now seen as short-term support. Additional support is seen near the 50-day moving average at 23.29. Prices are poised to test target resistance near the September highs at 24.82. The 10-day moving average is poised to cross above the 50-day moving average, which means that a short-term uptrend is now in place. Short-term momentum turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought. The fast stochastic is printing a reading of 98, well above the overbought trigger level of 80. The RSI is also rising, reflecting accelerating positive momentum.
Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher gold prices.
