Dovish Fed comments on Wednesday have proven supportive for precious metals, with silver prices getting additional support from increasing global economic optimism due to the vaccination drive and relaxation in COVID-19 lockdowns in leading economies, such as, the US and Eurozone.
As per reports on Wednesday, the number of vaccinations administered against the coronavirus has reached more than 1.1 billion globally. Still rising coronavirus cases globally are a major cause of concern. The overall global COVID-19 caseload has topped 154.7 million, while deaths have surged to more than 3.23 million, according to Johns Hopkins University.
Dovish comments are likely to keep supporting precious metals. Chicago Fed President Evans said monetary policy would be accommodative for "some time," and the risk of an outbreak of accelerating inflation is remote.
Also, New York Fed President Williams said he doesn't see higher asset valuations in the stock market or the housing market as being a significant risk for financial stability right now that would argue for dialing back bond purchases.
In addition, Minneapolis Fed President Kashkari said the Fed shouldn't cut off the jobs recovery prematurely with roughly eight million Americans out of work who were working before the pandemic.
Finally, Cleveland Fed President Mester said she "wouldn't consider the increase in inflation this year to be the type of sustainable increase needed to meet the forward guidance on our policy rate."
Increasing inflation expectations are also supporting precious metals, the US 10-year break even inflation rate jumped to an 8-year high of 2.474% on Wednesday.
However, weaker US economic data had a negative impact on silver prices. U.S. Apr ADP employment increased by +742,000, against expectations of +850,000, and the Apr ISM services index unexpectedly fell -1.0 to 62.7 against expectations of +0.4 to 64.1.
Silver prices found support from positive PMI data in the Eurozone, where the Apr Markit composite PMI was revised slightly higher to 53.8 from the previously reported 53.7—the fastest pace of expansion in 9 months.
Silver prices are likely to trade firm on supportive economic data globally and dovish comments from central banks. Silver may trade firm while above key support levels of 50 day EMA of $25.997 and 200 day EMA of $24.930; it may find some resistance around $27.303