- A risk-on market mood was no excuse for silver to advance, boosted by a soft US dollar.
- US Treasury yields fell, except for the 10-year TIPS, a headwind for silver prices.
- Silver Price Forecast (XAG/USD): In consolidation in the $21.50-$22.00 range.
Silver (XAG/USD) snaps two consecutive days of losses and edges higher by 0.50% in the mid-North American session as US traders return from a long weekend. At the time of writing, the XAG/USD is trading at $21.70, gaining $0.10.
Global equities are rallying, depicting a risk-on mood. In the meantime, the greenback is almost flat, as illustrated by the US Dollar Index, parked around 104.412, down by 0.01%. The US 10-year Treasury yield ascends three basis points, sitting at 3.298%, failing to drag the white-metal price down.
In the meantime, the US 10-year Treasury Inflation-Protected Securities (TIPS), a proxy for real yields, shifted positive and is yielding 0.696%, up by one basis point, a headwind for precious metals prices.
During the day, XAG/USD reached a daily high of around $21.94, but buyers lacked the strength to challenge the $22.00 figure, last tested on June 13. Consequently, the silver price fell, though it stayed around the $21.70 area.
Data-wise, the US economic docket featured some Fed speaking. Thomas Barkin, Richmond’s Fed President, commented that he decided on 75 bps in June on the University of Michigan (UoM) Consumer sentiment and inflation expectations reports. Furthermore, he added that 50 or 75 bps in July are reasonable and commented that inflation would go down once supply chain issues are resolved.
Earlier, the Chicago Fed National Activity Index for May came at 0.01, the lowest in eight months, trailing April’s 0.40. Of late, US Existing Home Sales dropped by 3.4% to 5.41 million in May 2022, the lowest level since June 2020.
In the week ahead, traders should prepare for Fed Chair Jerome Powell’s appearance at the US Senate Banking Committee, where he will be questioned about the US economy.
Silver Price Forecast (XAG/USD): Technical outlook
XAG/USD illustrates that the non-yielding metal is consolidating, though forming a bullish flag, within the $21.50-$22.00 range. Nevertheless, unless XAG buyers achieve a daily close above $22.00, silver bias will remain headed to the downside. Additionally, a two-month-old downslope trendline passes near the $22.00 figure, which means that any test could find some sellers lying around.
That said, the XAG/USD’s first resistance would be June 16 high at $21.96. Break above would expose the $22.00 mark, followed by the trendline mentioned above near $22.10. On the flip side, the XAG/USD first support would be $21.50. A breach of the latter would expose the May 19 swing low at $21.28, followed by a test of $21.00.
Key Technical Levels
|Today last price||21.70|
|Today Daily Change||0.12|
|Today Daily Change %||0.56|
|Today daily open||21.56|
|Previous Daily High||21.76|
|Previous Daily Low||21.48|
|Previous Weekly High||22.02|
|Previous Weekly Low||20.9|
|Previous Monthly High||23.28|
|Previous Monthly Low||20.46|
|Daily Fibonacci 38.2%||21.59|
|Daily Fibonacci 61.8%||21.65|
|Daily Pivot Point S1||21.43|
|Daily Pivot Point S2||21.31|
|Daily Pivot Point S3||21.15|
|Daily Pivot Point R1||21.72|
|Daily Pivot Point R2||21.89|
|Daily Pivot Point R3||22.01|
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