Silver Price Forecast: XAG/USD soars to nearly three-year peak above $28.00

Silver reaches $28.32, lifted by falling US Treasury yields, softer Dollar, despite Fed's hawkish view.
Israel's PM comments add to geopolitical tensions, boosting precious metals.
Market eyes US CPI for inflation insights; Fed vows to tackle inflation.

Christian Borjon Valencia FXStreet

Silver rallied to an almost three-year high, with the grey metal breaching key resistance on June 10, 2021. Buyers are eyeing May 2021 highs. Factors like a soft US Dollar and falling US Treasury yields underpin the precious metal amid speculations of a less dovish Federal Reserve. The XAG/USD trades at $28.00 a troy ounce after hitting a new multi-month high of $28.32.

XAG/USD breaks past $28.00 as declining US Treasury yields and geopolitical uncertainties fuel demand for safe-haven assets

The sudden reversal in US Treasury yields has driven the rally in precious metals. After gaining 15 basis points in the last two trading days, the US 10-year benchmark note drops to 4.37%, losing five bps. That and a softer Greenback sponsored Silver’s last leg up above the $28.00 threshold.

Geopolitical risks weigh on the buck and underpin precious metals. Israel Prime Minister Benjamin Netanyahu revealed they will complete the elimination of Hamas brigades, including in Rafah, and nothing will prevent this, according to Reuters. In the meantime, Israel's ceasefire proposal was rejected by Hamas.

Market participants are looking for the release of the latest inflation report in the United States (US). The Consumer Price Index (CPI) is expected to ease from a monthly perspective, yet it’s foreseen to be higher than February’s data in yearly figures. Core CPI is projected to dip in both readings.

Federal Reserve’s policymakers had crossed the wires. The latest to cross newswires was Minnesota Fed Neil Kashkari, who said the US central bank can’t fall short on the inflation fight.

XAG/USD Price Analysis: Technical outlook

The daily chart suggests that XAG/USD might continue to rally past the $28.00 figure, though the Relative Strength Index (RSI), turning overbought, spurred a pullback. That could be seen as traders booking profits.

If the retracement continues, Silver’s next support would be $27.50, ahead of testing the April 8 low of $26.87. On the other hand, a resumption of the uptrend would pave the way to test $28.32, ahead of climbing toward $29.00.

XAG/USD

Overview
Today last price	27.86
Today Daily Change	0.01
Today Daily Change %	0.04
Today daily open	27.85

Trends
Daily SMA20	25.4
Daily SMA50	23.94
Daily SMA100	23.77
Daily SMA200	23.5

Levels
Previous Daily High	28.08
Previous Daily Low	26.88
Previous Weekly High	27.5
Previous Weekly Low	24.75
Previous Monthly High	25.77
Previous Monthly Low	22.51
Daily Fibonacci 38.2%	27.62
Daily Fibonacci 61.8%	27.34
Daily Pivot Point S1	27.13
Daily Pivot Point S2	26.41
Daily Pivot Point S3	25.94
Daily Pivot Point R1	28.32
Daily Pivot Point R2	28.8
Daily Pivot Point R3	29.52

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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