Silver is trading marginally lower from yesterday’s high of $26.51; however, it is still sharply up from the recent low of $23.74 registered on Mar. 31. Silver is likely to get fresh direction from two days Federal Reserve meeting ending later today. We expect no major policy changes, however; it will be important to watch Chairman Jerome Powell’s outlook on the economy.
The dollar index is trading near 91.037 which is sharply lower from the recent high of 93.470 registered on Mar. 31. Also, weakness has continued in United States 10-year Bond Yield which is positive for precious metals prices. The United States 10-Year Bond Yield is now trading at 1.6410 and sharply lower from the recent high of 1.7760 registered on Mar. 30. However, prices recovered from the recent low of 1.5310 registered on Apr. 23.
Precious metals found support from Dovish comments from global central banks. BOJ Governor Kuroda said consumer spending would remain at a low level due to Covid, and it is "too early" to discuss the specifics of exiting from the BOJ's stimulus program.
On the economic data front, Japanese retail sales rose at the fastest pace in five months in March. Retail sales jumped 5.2% in March from a year earlier and against the market forecast for a 4.7% rise. The Conference Board's April U.S. consumer confidence index rose +12.7 to a 14-month high of 121.7, against expectations of 113.0. Also, the U.S. Feb S&P CoreLogic composite-20 home price index rose +11.9% y/y, against expectations of +11.8% y/y. China March industrial profits soared +92.3% y/y, the largest increase since the data series began in 2011. Global economic data were supportive of industrial metals demand and positive for silver prices.
According to the CFTC Commitments of Traders report for the week ended Apr. 20, net long for silver futures gained by 5,257 contracts to 41,681 for the week. Speculative long position rose by 5,738 contracts, while shorts also gained by 481 contracts.
Silver which is supported by dollar weakness is likely to get fresh direction from the Fed meeting later today. It may trade firm while above the key support level of 200 days EMA at $24.85 while it is likely to find stiff resistance around $26.99 and $27.70