Silver Price Forecast: XAG/USD closes around $23.00 despite rising US T-bond yields

Silver (XAG/USD) has continued rallying in the last three days, climbing some 0.31%, trading at $22.89 during the New York session at the time of writing. A risk-on market mood prevails in the financial markets, as positive Covid-19 related news has crossed the wires in the last couple of days.

Summarizing the aforementioned, South Africa reported in a study that people infected with the Covid-19 Omicron strain are 80% less susceptible to being hospitalized. Furthermore, the US Food and Drug Administration (FDA) approved Pfizer and Merck Covid-19 treatment pills, which would help the health system treat the disease on high-risk patients at home. That said, market participants, scramble towards riskier assets as the Santa Rally continues.

In the meantime, the US T-bond 10-year benchmark note raises some three and a half basis points, sitting at 1.494%, closing to the 1.50% threshold, though failing to underpin the greenback, as the non-yielding metal appreciates some 0.57%, versus the buck.

The US macroeconomic docket featured a large bulk of data before Christmas. Durable Good Orders for November rose by 2.5%, higher than the 1.6% estimated. The Fed’s favorite gauge of inflation, the Core Personal Consumer Expenditure (PCE), increased some 4.7%, higher than the 4.5% expected, sounding the bells on the Fed and justifying the increase of QE’s speed reduction. 

At the same time, Initial Jobless Claims for the week ending on December 17 rose to 205K in line with expectations, showing some consolidation in the labor market. Furthermore, at press time, the University of Michigan revealed its Consumer Sentiment Index for December, which came at 70.6 higher than the 70.4 estimated. 

XAG/USD Price Forecast: Technical outlook

Silver (XAG/USD) daily chart shows that the white metal has a downward bias, confirmed by the daily moving averages (DMAs) located well above the spot price. Nevertheless, the short-term price action, after reaching a YTD low around the $21.50s, XAG/USD is closing to the $23.00 figure, as the Relative Strength Index (RSI) broke above the 50-midline, triggering a bullish signal.

To the upside, XAG/USD resistance levels would be the psychological $23.00 figure. A decisive break of that level would expose the 100 and the 50-DMAs at $23.39 and $23.50, respectively.

On the flip side, silver first support would be December’s 22 daily low at $22.40, followed by the December 21 cycle low at 22.18, and the $22.00 figure.