Silver Price Forecast: XAG/USD steady around $22.40s on the back of falling US T-bond yields

Silver (XAG/USD) rallies during the New York session, up some |.79%, trading at $22.46 at the time of writing. The market sentiment is upbeat, as portrayed by European equity indices finishing in the green. Contrarily in the US, stocks fluctuate between gainers and losers, after on Wednesday, the Federal Reserve announced a faster bond-taper, and the median of its members penciled three rate hikes in 2022

Fed’s increase the speed of the bond-taper, projects three rate hikes in 2022

Fed’s last monetary policy of the year came as widely expected by markets. The US central bank announced that it would increase the pace of its QE reduction from $15 to $30 Billion, double the amount agreed in November’s meeting, meaning that they would end by March of 2022. Furthermore, it revealed its Summary of Economic Projections (SEP), which shows that the board expects inflation as high as 2.6% in 2022, 2.3% in 2023, and 2.1% in 2024, a tick higher than the September projections.

Apart from this, Fed’s policymakers expect that the Federal Fund Rate (FFR) will end at 0.90% in 2022, meaning the US central bank would hike three times. By 2023, they expect the FFR at 1.6%, and in 2024 at 2.1%.

In the meantime, the US 10-year Treasury yield slides four basis points, sits at 1.422%, a headwind for the greenback, thus favoring precious metals. The US Dollar Index, which tracks the buck’s performance against a basket of six peers, edges lower 0.48%, currently at 96.05.

XAG/USD Price Forecast: Technical outlook

Silver is trading above the hourly simple moving averages (SMAs), so XAG/USD has an upward bias in the near term. Additionally, the break of a slight down-slope trendline around $22.25 confirmed the aforementioned, exposing crucial resistance levels to the upside.

The first resistance would be the R2 daily pivot at $22.54, followed by the R3 daily pivot at $22.983, and then $23.00.

On the flip side, the first support would be the 200-hour SMA at $22.19, followed by the 100-hour at $22.09, and the 50-hour SMA at $21.99.