- Silver price jumps higher to $28.60, driven by worsening geopolitical tensions.
- Israel’s response to Iran’s attack will escalate fears of Middle East tensions spreading beyond Gaza.
- US bond yields edge down despite Fed lean towards higher interest rates for a longer period.
Silver price (XAG/USD) advances to $28.60 in Wednesday’s early New York session. The white metal witnesses significant buying interest as deepening Middle East tensions keep safe-haven bid firm. Investors are worried that tensions in the Middle East region could spread beyond Gaza as Israel said it will respond to Iran’s attack on their territory.
The Iranian military launched hundreds of missiles and drones on Saturday in retaliation to Israel’s attack on the Iranian embassy near Damascus in Syria in which two high-rank generals were killed. After Iran’s attack on Israel Tehran said, “the matter deemed to be closed.” However, should the Israeli regime make another mistake, Iran’s response will be considerably more severe, Wall Street Journal reported. The appeal for bullions strengthens when investors see geopolitical tensions escalating further.
Meanwhile, 10-year US Treasury yields fall to 4.63% despite Federal Reserve (Fed) sees interest rates remaining higher for a longer period. A decline in yields on interest-bearing assets eases the opportunity cost of holding an investment in non-yielding assets, such as Silver.
The US Dollar Index (DXY) exhibits strength near 106.20 as robust US Retail Sales data for March has improved the economic outlook. Higher spendings by households are done when labor market conditions remain tight, suggest strong economic outlook.
Silver technical analysis
Silver price faces selling pressure while attempting to break above horizontal resistance plotted from 3 August 2020 high at $29.86. The long-term outlook of the white metal is bullish as the 20-week Exponential Moving Average (EMA) at $24.85 is sloping higher.
The 14-period Relative Strength Index (RSI) shifts into the bullish range of 60.00-80.00, suggesting a strong upside momentum.
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 drops below 1.0500 after US inflation data
EUR/USD stays under pressure and trades below 1.0500 in the American session on Wednesday. The US Dollar stays resilient against its rivals after the data showed that the annual CPI inflation edged higher to 2.7% in November, not allowing the pair to stage a rebound.
Gold extends rally above $2,700
Gold preserves its bullish momentum and trades above $2,700 for the first time in two weeks. Investors fully price in a 25 basis points Fed rate cut in December following the November inflation data from the US, boosting XAU/USD.
BTC faces setback from Microsoft’s rejection
Bitcoin price hovers around $98,400 on Wednesday after declining 4.47% since Monday. Microsoft shareholders rejected the proposal to add Bitcoin to the company’s balance sheet on Tuesday.
Why is the ECB set to cut interest rates again and what does that mean Premium
The ECB is widely expected to cut interest rates on Thursday for the fourth time this year. This is a significant achievement as it suggests that the ECB, which sets monetary policy in the Eurozone, is accelerating its path towards lower interest rates after an unprecedented increase.
GBP/USD drops below 1.2750, awaits US inflation data
GBP/USD is back in the red below 1.2750 in European trading on Wednesday. The Pound Sterling loses traction amid renewed US Dollar buying as risk sentiment worsens heading into the key US CPI showdown. The US inflation data is key to gauging the pace of Fed's future rate cuts.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.