Silver Price Forecast: XAG/USD drops to near $23 as 10-year US yields soar to 5%
- Silver price slips to near $23.00 amid higher US bond yields.
- Iran’s intervention in the Israel-Palestine conflict would widen Middle East tensions.
- Silver price aims to climb above the 61.8% Fibo retracement at $23.36.
Silver price (XAG/USD) eases from monthly highs around $23.70 as 10-year US Treasury yields rose to 5% in the New York session. The white metal falls to near $23.00 amid a data-packed weak. Long-term US bond yields rose to record highs since 2007 on expectations that the Fed will keep interest rates higher for a longer period.
S&P500 opens on a bearish note amid escalating Middle East tensions. Iran’s intervention in the Israel-Palestine conflict would widen Middle East tensions. The US Dollar Index (DXY) demonstrates a volatile performance around 106.00 as the focus shifts to the United States Gross Domestic Product (GDP) data for the July-September quarter, which will be announced on Thursday.
As per the estimates, the growth rate was 4.2%, double from 2.1% recorded in the April-June quarter. An upbeat US GDP data would elevate hops of one more interest rate increase from the Federal Reserve (Fed).
Before that, investors will look for the preliminary S&P Global PMI for October, which will be published on Tuesday at 13:45 GMT. The Manufacturing and Services PMI is seen declining to 49.5 and 49.9 respectively.
Silver technical analysis
Silver price aims to climb above the 61.8% Fibonacci retracement (plotted from August 30 high at $25.00 to October 03 low at $20.68) at $23.36 on a two-hour scale. The short-term bias for the white metal is bullish as it is comfortably trading above the 50-period Exponential Moving Average (EMA), which trades at $23.00.
The Relative Strength Index (RSI) (14) drops into the 40.00-60.00 range, indicating a rangebound move ahead.
Silver two-hour chart
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Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
