- Silver price rallies to $29, boosted by safe-haven demand due to geopolitical tensions.
- A decline in US yields has reinforced demand for non-yielding assets.
- The US Dollar advances as speculation for Fed rate cuts wanes.
Silver price (XAG/USD) looks set for a positive weekly close for the third time in a row. The precious metal strengthens as geopolitical tensions and China’s weak economic outlook strengthen safe-haven demand.
Iran promised to retaliate against Israel’s air strike on their embassy near Damascus in which seven members of its Islamic Revolutionary Guard Corps (IRGC), including two generals, were killed. The war situation in Gaza between Israel and Palestine could further escalate after the direct intervention of Iran. Meanwhile, the Israeli administration vowed to invade Rafah where displaced Palestinians have been sheltered. Investors channel their funds into non-yielding assets, such as Silver, amid geopolitical uncertainty.
Meanwhile, a sharp decline in US Treasury yields has reduced the opportunity cost of investment in non-yielding assets. 10-year US Treasury yields retreat to 4.55% from a more than four-month high of 4.60%. The US Dollar Index (DXY) is an inch away from recapturing a five-month high at 106.00.
The US Dollar strengthens as stubbornly higher consumer price inflation and strong Nonfarm Payrolls (NFP) data for March have forced traders to unwind their bets leaned toward the Federal Reserve (Fed) to begin reducing interest rates in the June and July policy meetings. Now, investors see the Fed pivoting to rate cuts from September. Also, investors expect that the Fed will reduce interest rates only two times by the year-end instead of three projected by Fed policymakers in the latest dot plot.
Silver technical analysis
Silver price approaches an 11-month high near $30, plotted from 27 July 2020 high on a weekly timeframe. The long-term outlook is bullish as the 20-week Exponential Moving Average (EMA) at $24.56 is sloping higher. The 14-period Relative Strength Index (RSI) rises to 73.00, suggesting strong buying momentum. More upside remains favored amid the absence of divergence signals.
Silver weekly chart
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
EUR/USD declines below 1.0700 as USD recovery continues
EUR/USD lost its traction and declined below 1.0700 after spending the first half of the day in a tight channel. The US Dollar extends its recovery following the strong Unit Labor Costs data and weighs on the pair ahead of Friday's jobs report.
GBP/USD struggles to hold above 1.2500
GBP/USD turned south and dropped below 1.2500 in the American session on Thursday. The US Dollar continues to push higher following the Fed-inspired decline on Wednesday and doesn't allow the pair to regain its traction.
Gold stuck around $2,300 as market players lack directional conviction
Gold extended its daily slide and dropped below $2,290 in the second half of the day on Thursday. The benchmark 10-year US Treasury bond yield erased its daily losses after US data, causing XAU/USD to stretch lower ahead of Friday's US jobs data.
Top 3 Price Prediction BTC, ETH, XRP: Altcoins to pump once BTC bottoms out, slow grind up for now
Bitcoin reclaiming above $59,200 would hint that BTC has already bottomed out, setting the tone for a run north. Ethereum holding above $2,900 keeps a bullish reversal pattern viable despite falling momentum. Ripple coils up for a move north as XRP bulls defend $0.5000.
Happy Apple day
Apple is due to report Q1 results today after the bell. Expectations are soft given that Apple’s Chinese business got a major hit in Q1 as competitors increased their market share against the giant Apple.