Silver prices continued to consolidate along with gold and the dollar. The rangebound nature of these products is tied to the hip. U.S. Treasury yields moved lower following a slightly weaker than expected Dallas Fed Survey, a preview of the national ISM Manufacturing number scheduled to be released on Thursday. The long-term technical picture is very toppy. Prices have a lot of work to make it above the recent highs.
Technical analysis
Silver prices moved sideways and like gold, continue to form a bear flag continuation pattern, which is a pause that refreshes lower. The dollar is trading conversely, forming a bull flag continuation pattern. The fly in the ointment appears to be the selloff in U.S. Treasury yields. Support is seen near an upward sloping trend line come in at 25.70. A secondary upward sloping trend line comes in near 25.25. The short-term trend is downward sloping as the 10-day moving average recently crossed below the 100-day moving average. Short-term momentum is positive as the fast stochastic generated a crossover buy signal in overbought territory and has moved higher, printing a reading of 20.6 just above the oversold trigger level of 20.
The Dallas Fed Misses Expectations
The Dallas Fed survey missed expectations but several of the sub-components saw sizable gains. The production index of Dallas Fed Index increased to 29.4 in June from 15.7 in May. The index for general business activity, which assesses broader business conditions, fell to 31.1 in June from 34.9 in May. The new orders index increased to 26.7 in June from 20.8 in May, while the growth rate of orders index climbed to 23.4 from 19.5 the previous month. The capacity utilization index rose seven points to 30.6, and the shipments index increased 14 points to 31.8.