Silver price remains on a bearish consolidation pattern as the US bond yields maintain a prolonged bullish consolidation formation. Notably, Treasury yields tends to have an inverse correlation with precious metals as they boost the value of the US dollar.
After hitting a four-month low of 1.35 on Monday, the benchmark 10-year Treasury yields rebounded to seesaw at around 1.50. At the same time, the dollar index has been range-bound for the better part of the week between 91.65 and 91.90.
However, silver price is finding support in President Biden’s infrastructure plan. Granted, the $1.2 trillion bipartisan bill is significantly lower than the initially proposed $2.3 trillion. The success of the bill no depends on a larger package, which has received immense resistance from the Republicans.
Silver price has been range-bound for a week now. Since last week’s Friday, the precious metal has largely been trading within a horizontal channel with 25.70 and 26.07 as the lower and upper borders respectively. At the time of writing, it was down by 0.02% at 25.93. On a two-hour chart, it is trading along the 25-day EMA, with the 50-day EMA lying along the channel’s upper border.
As the week comes to an end, I expect silver price to continue finding resistance along the horizontal channel’s upper border at 26.07. If the bulls gather enough momentum, they may be able to push the process further towards the next target at 26.50. On the flip side, it may decline to find support at the channel’s lower border at 25.70, or further below at 25.50.