Silver Drops As Treasury Yields Rise
New York (Jan 3) Silver is trying to settle below the support level at $22.75 while U.S. dollar is gaining ground against a broad basket of currencies. Meanwhile, iShares Silver Trust is trying to get below the $21.00 level.
The U.S. Dollar Index has recently managed to get back above the 96 level. In case the U.S. Dollar Index gains additional upside momentum, it will head towards the resistance at 96.25 which will be bearish for silver and gold price today. Strong dollar is bearish for precious metals as it makes them more expensive for buyers who have other currencies.
Gold declined below the support level at $1815 and made an attempt to get to the test of the next support at $1800 while SPDR Gold Trust declined below the $169 level. If gold moves back below the $1800 level, it will gain additional downside momentum and head towards the $1775 level which will be bearish for silver.
Gold/silver ratio has recently managed to settle above the 79 level and is trying to get above 79.50. In case this attempt is successful, gold/silver ratio will head towards the 80 level which will be bearish for silver.
It should be noted that Treasury yields gained strong upside momentum at the start of the year. The yield of 2-year Treasuries moved from 0.74% to 0.80%, providing support to the U.S. Dollar and putting pressure on precious metals.
Silver declined below the support level at $22.90 and is testing the next support at $22.75. A move below this level will push silver towards the next support at $22.60.
If silver manages to settle back below $22.60, it will head towards the support at $22.30. A move below this level will open the way to the test of the support at $22.10.
On the upside, the previous support at $22.90 will serve as the first resistance level for silver. If silver settles above this level, it will head towards the resistance at the 50 EMA which is located near $23.15. A successful test of this resistance level will open the way to the test of the resistance at $23.50.
FXEmpire
