Silver prices are holding in a tight range near $27.54 - $28.10 however, weakness in the US dollar is likely to support precious metals. Silver prices are still trading higher from the recent low of $23.785 registered on Mar. 31. The dollar index future continued to trade near 90.00 from last six trading session and sharply lower from 93.47 registered on Mar. 31. Weakness in US bond yield is also supportive for precious metals. US 10-year bond yield is currently trading near 1.593 which is sharply lower from the last 1.692.
Precious metals found support when Fed Governor Brainard said inflation expectations remain "extremely well-anchored," and inflation should start to fall later this year as "base effects" subside. Also, ECB Vice President Guindos said the June ECB policy decision would be data-dependent, but "we have to maintain very accommodative monetary policy conditions."
Liquidity in Japan continues to grow and is supportive of precious metals. The BOE has increased its asset purchase facility by +0.4% to a record 823.6 billion pounds in the week ended May 19.
According to the CFTC Commitments of Traders report for the week ended May 18, net long for silver futures sank by 1,862 contracts to 50,981 for the week. Speculative long position increased by 243 contracts, while shorts were added by 2,105 contracts.
Silver prices are likely to trade firm while above the key support level of 20 days EMA of $27.44 and 50 days EMA of $26.90 meanwhile immediate resistance is seen around $28.28-$28.56.