- Silver prices refresh intraday low to consolidate biggest daily gains in two weeks.
- Western pressure on Russia escalates ahead of Biden’s Europe trip, Moscow hands over Persona Non Grata to US Embassy.
- US PMIs, Durable Goods Orders also become important to watch.
Silver (XAG/USD) takes offers to renew intraday low around $25.05, down 0.12% on a day as traders pare the biggest daily gains in a fortnight during Thursday’s Asian session.
The metal’s recent losses could be linked to the US dollar’s strength amid a risk-off mood. That said, the US Dollar Index (DXY) rises for the second consecutive day while renewing an intraday high of around 98.80, up 0.14% on a day at the latest.
Market sentiment sours as grim concerns surrounding the Ukraine-Russia crisis escalate ahead of US President Biden’s meeting with the North Atlantic Treaty Organization (NATO) allies in Europe. Among them, the UK and the US readiness for more help to Ukraine despite Russia’s handling of a list of diplomats termed as ‘persona non grata’ to the US embassy, gain major attention. On the same line were comments from US Senator John Cornyn who recently said he met with US Treasury Secretary Janet Yellen to discuss Russian gold sanctions. Also adding to the risk-off mood is the worsening virus woes in China and Europe.
Furthermore, hawkish Fedspeak and firmer US data have been underpinning the US dollar, as well as the Treasury yields, which in turn weigh on silver prices.
Additionally, the market’s anxiety ahead of the key US preliminary PMIs for March and Durable Goods Orders for February also weaken the risk appetite. Forecasts suggest that the US Markit Manufacturing PMI may weaken to 56.3 from 57.3 previous readouts while the Services PMI seemed to have dropped to 56.0 from 56.5. Further, the US Durable Goods Orders growth for February is likely turned negative with -0.5% forecasts versus 1.6% prior.
Read: Durable Goods Orders Preview: Upside surprise set to trigger next leg up in the dollar
On the positive side, news from the US Trade Representative’s (USTR) office surrounding the Sino-American trade pact seems to have helped the market sentiment. In the latest update, USTR mentioned that it will reinstate 352 expired product exclusions from US ‘Section 301’ tariffs on imported goods from China. These exclusions were expired in 2020.
Amid these plays, the US 10-year Treasury yields pause the early Asian session pullback around a three-year high while the S&P 500 Futures struggle for clear direction after Wall Street’s first negative day in seven.
Moving on, US data and risk catalysts will be crucial for silver traders with a rush to risk-safety likely benefiting the bears.
Technical analysis
Wednesday’s rebound failed to cross the 21-DMA hurdle surrounding $25.25, which in turn directs silver sellers towards monthly support near $24.75.
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