Silver Price Outlook: What Awaits the Precious Metal in Q2’21?
- The easing of the US dollar and treasury yields have pushed silver price higher by 0.02% at $24.42.
- The metal remains on a downtrend at the start of Q2'21.
- Investors await the metal's reaction to the $2 billion US infrastructure plan.
Silver price remains on a downtrend as the US dollar and treasury yields rally. However, following today’s easing of the yields and greenback, the metal rose by 0.02% to $24.42. Investors are now keen on price movements in the second quarter.
Silver price movements in Q1’21
Silver price remains in the bear market as we get into the year’s second quarter. Notably, the metal hit a 8-year high in February after it became the target of r/WallStreetBets. After the market chaos ended, the price gained downwards momentum.
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The downtrend is largely because of the strengthening US dollar and treasury yields. Inflation concerns have triggered a decline in US government bond price. Since mid-February, the benchmark 10-year bond price has declined by over 5%. Bond price has an inverse relationship with its yields. The 10-year treasury yields are trading close to the record high of 1.77 hit on Tuesday. On Thursday, the yields pulled back to 1.69.
The easing of US treasury yields has curbed the gains of the US dollar; offering some relief to silver price. The dollar index was down by 0.17% at $93.07. Nonetheless, this is close to Tuesday’s high of $93.44, which is its highest level since November 2020.
As we usher in the second quarter, investors looking to trade silver are keen on how the metal will react to the proposed spending package. Silver price reacted sparingly to the $1.9 trillion COVID-19 relief package. The focus is now on President Biden’s $2 trillion infrastructure plan and how it will influence the metal’s price movements.
Silver Price Technical Outlook
After shooting to a 8-year high in February at around $30.10, silver price has since dropped by over 22%. It started the new month at $24.42, which represented a 0.02% rise. However, it remains on a downtrend. The metal is trading below the 50-day exponential moving average and the long-term 200-day EMA.
On Thursday’s session, it is trading sideways as the markets ease ahead of the Easter holiday. In the near term, silver price is likely to consolidate within a broader range. In this range-bound trading, the support level will be at around 23.73. on the upper end, it is likely to experience resistance at the psychological level of 25.