Silver Price Analysis: XAG/USD stays depressed around mid-$26.00s, bears await fresh clues
|- Silver eases inside the immediate trading range above $26.00.
- S&P 500 Futures waver around 3,900, US Treasury yields stay depressed.
- Bears seem tiring amid a lack of fresh catalysts, stimulus/vaccine in focus.
Silver sellers attack the lower end of the immediate trading range between $26.40 and $26.60 during the initial Asian session on Tuesday. Even so, the white metal struggles for clear direction amid a lack of major catalysts and a lack of market-moving data/events.
The bullion dropped for the third day on Monday as the US dollar gains pressured down the commodity prices. Also challenging the precious metal could be the upbeat performance of equities that lured market funds amid hopes of fiscal stimulus from the US and the UK.
In addition to the expectations of heavy financial relief by the American and the British government, approval of the one-shot covid vaccine also favored the risks the previous day. Furthermore, upbeat PMIs, ex-China, joined further recovery in global economics to defy the reflation worries. Also on the risk-positive side could be the latest rush among the global central bankers to renew investor confidence and turn down the fears of policy change.
On the contrary, an uptick in the coronavirus (COVID-19) infections joined the fears of the Brazilian variant of the virus to heavy the mood. Further, fresh jitters surrounding the US-China and the Washington-Tehran relations offer an extra burden on the market sentiment.
Against this backdrop, the Wall Street benchmark registered notable gains on Monday whereas the US 10-year Treasury yields dropped back to 1.42% by the end of the North American session.
Looking forward, the month-start week keeps traders busy but nothing more important gains the market attention ahead of Friday’s US employment data for February. Elsewhere, US policymakers have pushed President Joe Biden’s $1.9 trillion stimulus to the Senate whereas the UK Budget is also up for publishing on Wednesday. Hence, any further development on the aid packages will be the key to watch.
Technical analysis
In addition to the 50-day SMA, currently around $26.50, an ascending trend line from November 30, at $26.25 now, also keeps the silver buyers hopeful of a recovery move eyeing the $27.30 hurdle.
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