Silver Targets $68 as Yields and Oil Prices Fall
Silver prices rose 4% to $65.87 on September 17, driven by softer US Treasury yields and lower oil costs. Analysts at Mirae Asset project a move toward $68 if the current trend holds.
Silver prices increased by 4 percent to reach $65.87 on September 17. This gain followed a bounce from the key support level of $62.85. The move occurred despite a hawkish rate hike by the Federal Reserve on the previous day.
Mirae Asset identifies $68 as the next major resistance target for the metal. Interim resistance is set at $66.55. Support levels are established between $64.50 and $62.80.
Yields and oil drive price action
Softer US Treasury yields and falling oil prices support the silver rebound. These factors offset the negative impact of the Federal Reserve's monetary policy. The metal had hit a cycle high of $71.20 on August 28.
The US Dollar Index eased slightly on Thursday after a surge on Wednesday. It hovered around 100.13, down 0.1 percent for the day. Lower yields and oil prices contributed to this movement in foreign currencies.
Federal Reserve maintains hawkish stance
The Federal Reserve raised the federal funds target range by 25 basis points. The new range is set at 3.75 percent to 4.00 percent. The decision was unanimous among the twelve committee members.
Inflation remains the predominant concern for policymakers. The committee projected another rate increase before the end of the year. They removed an expected rate cut from next year’s projections.
Global central banks adjust policy
The Bank of England kept its benchmark rate unchanged at 3.75 percent. Three of the nine members voted for a hike. The bank warned that a prolonged conflict in Iran could force rate increases.
The Bank of Japan is expected to hike its benchmark rate by 25 basis points. This decision is scheduled for its policy meeting on September 18. The Bank of China is expected to keep its Loan Prime Rate unchanged on September 21.
