Silver Price Forecast: XAG/USD advances steadily, eyeing the $20.00 figure

XAG/USD climbed on a risk-on impulse and lowered US T-bond yields.
US PPI for August tempered inflationary pressures on the producer side.
XAG/USD Price Analysis: Break above $20.00 to send silver towards $21.00 mark.

Christian Borjon Valencia FXStreet

Silver price rebounds at around the 50-day EMA and climbs towards a daily high near $19.69 on Wednesday after the US Labor Department revealed that August PPI was aligned with expectations easing inflationary pressures on the producer side, contrarily to Tuesday’s CPI.

Therefore, the XAG/USD is trading at $19.61, above its opening price by 1.86%.

Before Wall Street opened, US data revealed by the Bureau of Labour Statistics (BLS) showed that the PPI for August shrank by 0.1%, aligned with the consensus, while the year-over-year figure was down at 8.7%, less than July’s 9.8% report. Meanwhile, the so-called core PPI, which excludes volatile items, edged higher, 0.4% MoM, but on an annual reading, edged up by 7.3%.

In the meantime, the US Dollar Index, a measure of the buck’s value against a basket of six currencies, finished Wednesday’s session down by 0.15%, at 109.648, undermined by US Treasury yields, mainly the 10-year benchmark note rate, unmoved during the day at around 3.404%.

The reflection of the abovementioned is the US Dollar Index, losing some traction, down by 0.09%, below the 110.000 mark. At the same time, the US 10-year benchmark note rate shows signs of exhaustion, flat at around 3.414%.

Another tailwind for the white metal prices was that the US 10-year TIPS, a proxy for real yields, gained only one bps, sitting at 0.939%.

On Thursday, the US economic docket will feature unemployment claims, retail sales, and the New York and Philadelphia Fed Manufacturing Indices, a prelude for October’s ISM report.

Silver Price Analysis (XAG/USD): Technical outlook

The XAG/USD daily chart illustrates the white metal as neutral-to-downward biased. However, if silver buyers reclaim the $20.00 mark, that could pave the way for a test of a four-month-old downslope trendline around $20.20 before reaching the 100-day EMA at $20.39. A breach of the latter will expose the August 15 cycle high at $20.87, ahead of the $21.00 psychological level.

XAG/USD

Overview
Today last price	19.61
Today Daily Change	0.30
Today Daily Change %	1.55
Today daily open	19.33

Trends
Daily SMA20	18.8
Daily SMA50	19.24
Daily SMA100	20.45
Daily SMA200	22.17

Levels
Previous Daily High	19.95
Previous Daily Low	19.33
Previous Weekly High	18.95
Previous Weekly Low	17.85
Previous Monthly High	20.88
Previous Monthly Low	17.94
Daily Fibonacci 38.2%	19.57
Daily Fibonacci 61.8%	19.71
Daily Pivot Point S1	19.13
Daily Pivot Point S2	18.92
Daily Pivot Point S3	18.51
Daily Pivot Point R1	19.74
Daily Pivot Point R2	20.15
Daily Pivot Point R3	20.36

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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