Silver Price Forecast: XAG/USD loses steam and falls below $24.00 on firm US yields

Silver price retreats by 0.78% and dips below the $24.00 figure on Friday as the Greenback (USD) remains bid during the North American session. A Federal Reserve official pushing back against a premature shift to ease policy and firm US Treasury bond yields is a headwind for the grey metal. The XAG/USD trades at $23.97 after hitting a daily high of $24.28.

Silver’s uptrend remains intact, but downside risks remain

Following last Wednesday's Chair Jerome Powell press conference, the New York Fed President John Williams was called to do damage control. Williams said, “We aren’t really talking about rate cuts,” adding that a rate cut in March is “premature.” That said, US Treasury bond yields erased is losses, and the Greenback rose. Therefore, XAG/USD dipped below $24.00 as traders also booked profits ahead of the weekend.

On the data front, US Industrial Production slowed by 0.2%, missed forecasts but exceeded November’s .0.9% plunge. S&P Global revealed that business activity improved, lifted by the services sectors as manufacturing continues to contract. This depicts the US economy remains solid, despite 525 basis points of tightening by the Fed.

Another driver that weighed in XAG/USD was an uptick in US real yields, which dropped toward 1.67%; before recovering toward 1.70%. Additionally, the US Dollar Index (DXY) which tracks the currency’s performance against a basket of six other rivals, advanced 0.51%, sits at 103.47.

XAG/USD Price Analysis: Technical outlook

The XAG/USD is neutral to upward biased as it remains above the daily moving averages (DMAs) which remain flatlines below the spot price. However, sellers loom as they eye a test of the 200-DMA at $23.57, which once cleared, could open the door for further downside. Key support levels are seen the 50-DMA at $24.29, followed by the 100-DMA at $23.19. On the flipside, the first supply zone would be the $24.00 figure, followed by the current week’s high at $24.28.