Silver Price: Key Levels to Watch Amid Rising US Bond Yields

Written by: Faith Maina
April 29, 2021
  • Silver price has been range-bound for two weeks between 26.50 and 25.75.
  • With the rising US treasury yields, a bearish breakout is likely.
  • China’s manufacturing PMI will offer further cues on the direction of silver price.

Silver price remains on range-bound trading after the Fed interest rate decision. The metal is down by 1.02% at 25.93 amid rising US bond yields.

silver price

Fed Interest Rate Decision

On Wednesday, the US central bank left interest rates unchanged. By maintaining a dovish tone, it indicated that it would continue with its aggressive monetary policy until the economic recovery is complete. The bank’s Chair, Jerome Powell further noted that the recovery is still uneven.

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Following the Fed’s decision, the US bond yields have recouped the previous session’s losses as they soar towards the record-high of 1.70 hit two weeks ago. At the time of writing, the benchmark 10-year US treasury yields were up by 3.86% at 1.67. The surge has offered some support to the US dollar, which is up by 0.11% at 90.69. However, it is still close to the intraday low of 90.42; its lowest level since 26th February. The weakening of the greenback has supported silver price. However, with the rising treasury yields, the precious metal could have its prices decline in the near term.

Silver price is also reacting to the first preliminary US GDP data. According to the Commerce Department, the GDP expanded at an annualized rate of 6.4%. This is higher than the 4.3% in Q4’20. Investors looking to buy silver are now keen on how the China manufacturing PMI numbers will impact the prices, based on the metal’s industrial role. The data, which is scheduled for release on Friday, is expected to come in at 51.7 compared to March’s 51.9.  

Silver Price Technical Outlook

On Wednesday, silver price rose from its intraday low of 25.84 to 26.48 earlier on Thursday. At the time of writing, it was down by 1.02% at 25.93. On a 4-hour chart, it is trading below the 25 and 50-day exponential moving averages. Notably, it has been range-bound between 26.50 and 25.75 for two-weeks now.

In my view, silver price will remain range-bound in the near term before experiencing a bearish breakout. A move below 25.50 will signal a bearish breakout. Below that point, the next targets will be the psychological 25.00 and the lower 24.68. However, this thesis will be invalid if the prices break past the 26.50 resistance level. If that happens, the bulls will be eyeing 27.00.

silver price