- XAG/USD found support at a low of around $22.30 and then increased towards $22.65.
- After recovering on Monday, US Treasuries resumed their downfall.
- A strong USD limits the upside.
In Tuesday's session, the Silver spot price XAG/USD cleared most of its daily losses after bottoming at a low of $22.30 and then jumping back to $22.65. There were no relevant highlights during the session, and the metal's price dynamics were set by falling US yields, which benefited the metal.
In line with that, the 2,5 and 10-year yields declined to 4.90%, 4.52% and 4.54% but remained at lows of over a month. Those rates seem to be reflecting dovish bets on the Federal Reserve (Fed) after last week's decision, where markets perceived hints of the bank approaching the end of its tightening cycle. In addition, weak Nonfarm Payrolls figures reported on Friday exacerbated the decline, which benefited further the price of the non-yielding metal.
Markets focus shifts to next week's inflation data from the US, where markets expect the Consumer Price Index (CPI) to have decelerated in October. In that sense, soft figures may trigger further dovish bets on the Fed, which could weaken the US Dollar and fuel the price of Silver. As for now, the CME FedWatch tool indicates that the odds of a 25 bps hike in the Fed's next December meeting declined to nearly 10%.
XAG/USD Levels to watch
Upon analyzing the daily chart, bearish sentiment is evident for the short term for the XAG/USD. Relative Strength Index (RSI) resides below its midline in negative territory, exhibiting a southward trajectory which aligns with a negative indication from the Moving Average Convergence Divergence (MACD), as shown by the presence of red bars, underscoring the growing bearish momentum. On the other hand, the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), highlighting the continued dominance of bears on the broader scale, requiring the buyers to take action. That being said, fundamentals could revive the bullish momentum in case it aligns with the dovish Fed rhetoric.
Support levels: $22.30, $22.15, $22.00.
Resistance levels: $22.85 (20-day SMA), $23.15-30 (100 and 200-day SMA convergence), $23.50.
XAG/USD Daily Chart
-638350570112670038.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD rises to near 1.2540, driven by higher UK GDP
GBP/USD edged higher to near 1.2540 during Asian hours on Friday, buoyed by the release of higher-than-expected UK Gross Domestic Product (GDP) data for the first quarter.
EUR/USD: The crucial resistance level will emerge at the 1.0790–1.0800 region
The EUR/USD pair trades on a softer note near 1.0775 during the early European hours on Friday. The downtick of the major pair is supported by the renewed US Dollar demand amid hawkish comments from Federal Reserve officials.
Gold price attracts some buyers despite hawkish Fedspeak
Gold price edges higher for the second consecutive day on Friday. Weak employment data bolstered the speculation that the weakening economy would force the Fed to cut rates.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Rate cut optimism fuelled by higher US jobless claims
With Federal Reserve policy acting as the primary driver of investor sentiment in 2024, renewed optimism surrounding the possibility of rate cuts has propelled the Dow to its most significant rally since December.