Silver price

Silver Price Drops After Janet Yellen’s Remarks on Interest Rates

Silver price is trading lower as investors digest Janet Yellen’s comments regarding President Biden’s spending proposal and inflation. According to the Treasury Secretary, who is also a prior Fed Chair, the president should push on with the proposed $4 trillion spending package. On the one hand, she notes that that could trigger inflation and result in higher interest rates. However, she is of the opinion that the environment will be good for the economy. She insists that the spending plan would not result in an inflation over-run.   

Silver price is also reacting to the rebounding US bond yields. Earlier on Monday, the benchmark 10-year Treasury yields were at 1.61. However, they dropped to 1.56 before rising by 1.75% at the current 1.58. The 5 and 30-day Treasury yields are also higher by 1.59% and 0.92% respectively. Rising yields, which usually offer support to the US dollar, push silver prices lower.    

Silver price technical outlook

Silver price is down by 0.48% at 27.65. Earlier in the day, the precious metal was higher at 27.79 before pulling back to an intraday low of 27.48. On a two-hour chart, it is trading along the 25-day EMA and slightly below the 50-day EMA. I expect the precious metal to be range-bound between Monday’s intraday low of 27.48 and 27.80. A move beyond the horizontal channel’s borders on each side will invalidate this thesis.

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