Silver prices remain under pressure amid rising US bond yields

By: Faith Maina
Faith Maina
Faith strives to break down complex developments so investors can make better informed decisions. When Faith is not immersed in the… read more.
on Mar 19, 2021
Updated: Mar 23, 2021
  • With the formation of the bearish flag, the downtrend is likely to continue.
  • Silver prices are under pressure from the rising US treasury yields and strengthening greenback.
  • Silver prices are trading at around $26.18, down from Thursday's two-week high of $26.65.

Silver prices remain under pressure from the strengthening dollar and rising treasury yields. On Friday, the precious metal was trading at $26.15. This marked a decline from the previous session’s high of $26.65, which is its highest level since the beginning of March.

Silver prices in light of the US bond yields

The rise in US treasury yields has weighed on silver as a safe haven and hedge against inflation. The 10-year bond yields hit a one-year high at 1.754%. However, they have since eased to around 1.700%. The subsequent strengthening o the greenback has exerted pressure on silver prices. On Friday, the US dollar index (DXY) sustained the previous session’s gains at around $91.85.

Silver’s industrial demand

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Silver prices have found support from the bullish Chinese industrial production figures released earlier in the week. The country’s National Bureau of Statistics indicated that industrial production in the first two months of the current year rose by 35.1% compared to the forecasted 30%.

However, the US core retail sales fuelled resistance for the silver prices. The reading of -2.7% was lower than the predicted -0.1%. For investors looking to trade silver, the measure of consumer spending pointed to a lower demand for silver as an industrial metal.   

Silver prices technical outlook

Silver prices have pulled back from the gains reached earlier in Thursday’s session. The precious metal was trading at a two-week high of about $26.65 before dropping to $26.18 as at 12.09 GMT. Notably, the prices are slightly above the 20 and 50-day exponential moving averages.

Besides, the silver price is within the bearish flag whose formation began towards the end of last month. As such, a downward trend is likely. If that happens, the bears will be testing the previous session’s low of $25.75, as well as the lower levels of $25.34 and $24.78.

On the flip side, silver prices are likely to find resistance around today’s high of $26.65. If it manages to move past that level, the next target to look out for is $28.34.

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