Precious Metals

Silver is trying to recover its positions
Silver prices are moderately declining during the morning session, again testing 22 for a breakdown. The day before, the instrument made another attempt to grow, reacting to a corrective decline in the yield of US Treasury bonds, which retreated from their previous highs at 3.038% to 2.979%.

At the same time, trading participants are in no hurry to open new trading positions for the instrument, preferring to wait for the decisions of major global financial regulators on monetary policy issues. In particular, a meeting of the European Central Bank (ECB) will be held this week, at which, as expected, the regulator may announce the start of a quantitative tightening program, and next week the key issues will be discussed by the US Federal Reserve and the Bank of England, from which the market expects a "hawkish" rhetoric. In turn, the Bank of Japan, judging by the recent comments of its Governor Haruhiko Kuroda, will maintain a soft position.

Moderate demand for silver is also supported by the gradual recovery of industrial activity in China. However, the situation is ambiguous here, as growth in Asia may be offset by a noticeable drop in industrial activity in Europe, where supply chain disruption, high inflation and rising energy prices are causing many factories to stop working. Disruptions are especially noticeable in high-tech areas, where the use of silver as a raw material has always occupied a fairly high percentage.

Although the number of positions in gold for the last week began to gradually increase, the statistics for silver remains at the levels of the previous week. According to the latest report from the US Commodity Futures Trading Commission (CFTC), the advantage in open positions remains in favor of sellers (37.877K positions), while buyers have only 7.797K open contracts. In addition, last week, buyers liquidated 0.926K positions, while sellers, on the contrary increased their number by 0.997K.



On the D1 chart, Bollinger Bands are gradually reversing horizontally. The price range is slightly narrowed from below, being spacious enough for the current activity level in the market. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic, having not reached its boundary level of "80", reversed into a horizontal plane, reacting to the emergence of "bearish" trend during the Asian session.

Resistance levels: 22.40, 22.7, 23, 23.32 | Support levels: 22, 21.69, 21.39, 21.12



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Gold prices show a corrective decline, retreating from their local highs from May 9, updated at the beginning of the week. Investors are taking profits on long positions opened last Friday, when the demand for XAU/USD increased again after the publication of multidirectional macroeconomic statistics on inflation in the US. The released data showed an acceleration of the indicator in May to 8.1%, which was a new record high since December 1981. On a monthly basis, the country's Consumer Price Index accelerated from 0.3% in April to 0.7%, and the Core CPI excluding Food and Energy, slowed down to 6.0% from 6.2%, which is quite obvious, because the reason for the current negative dynamics in the United States is the rise in energy prices.

In turn, the revision of inflation data is likely to lead to a more aggressive policy of the US Federal Reserve, aimed at tightening monetary conditions. In particular, the regulator may decide to either raise interest rates more quickly, for example, by 75 basis points at once, or continue the planned correction of the value after two meetings in June and July. Earlier it was assumed that officials would take a break after two rate hikes in the summer, to assess the impact of the measures taken on the economy and consumer price growth.



Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is expanding; however, it fails to catch the surge of last week's "bearish" sentiments. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic is showing similar dynamics; however, the indicator line is already approaching its highs, indicating the risks of overbought instrument in the ultra-short term.

Resistance levels: 1869.49, 1878.84, 1900, 1920 | Support levels: 1850.20, 1823.09, 1800, 1775



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