Silver Price Forecast: XAG/USD hovers around $23.80 amid a risk-off market mood
|- Rising US T-bond yields underpin the greenback weigh on the precious metals complex.
- Ukraine and Russian tensions keep the markets looking for the safe-haven status of the USD.
- XAG/USD Technical Outlook: Bearish biased unless it breaks above the 200-DMA at $24.61.
Silver slides for the third consecutive trading session, trading at $23.81 during the New York session at the time of writing. The market mood has remained unchanged since the beginning of the week. Ukraine – Russian conflict keeps grabbing the headlines while market participants await the Federal Reserve monetary policy decision.
The white metal – a safe-haven precious metal like gold–failed to appreciate, despite geopolitical issues in part attributed to the US T-bond yields, recovering some of Monday’s losses, when it pierced the 1.70% threshold at press time sits at 1.747%, underpins the greenback. The US Dollar Index, a gauge of the buck’s value against a basket of its rivals, advances 0.28%, up to 96.118 at 14:19GMT.
Analysts at TD securities expressed that a hike to the funds rate at the March FOMC meeting has already been signaled by Fed policymakers, led by Jerome Powell. A lift-off signal from the January meeting should not surprise anyone. Nevertheless, the topic that keeps investors uneasy is Quantitative Tightening (QT), or the balance sheet reduction.
The US economic docket featured the Housing Price Index (HPI), which came at 1.1% in line with expectations. At 15:00 GMT, the Conference Board will release the Consumer Confidence for December, expected at 111.4.
XAG/USD Price Forecast: Technical outlook
On Tuesday, the white metal is trading near the close of Monday, which was $23.98. two cents from the $24.00 threshold. The price action of the last two days approached the 78.6% Fibonacci retracement drawn from the last pivot low at $22.81 to the highest of the year at $24.70. However, the white metal is bearish-biased unless XAG/USD breaks the 200-day moving average (DMA) at $24.61.
To the upside, the first resistance is the 38.2% Fibonacci retracement level at $23.98, unsuccessfully broken one time. The next supply zone would be the January 24 daily high at $24.31, followed by the abovementioned 200-DMA at $24.61.
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