- The market sentiment is upbeat, which triggers a move from safe-haven assets towards riskier ones.
- Rising US T-bond yields boost the greenback while weakens the non-yielding silver.
- Positive divergence and a bullish-piercing pattern on a daily chart triggered the move towards $22.60.
Silver (XAG/USD) is sliding for the first day out of four, trading at $22.62, down 0.25% during the day at the time of writing. Investors’ risk appetite is in risk-on mode, depicted by US stock indices price action, with the S&P500, the Dow Jones, and the Nasdaq posting gains of 1.48%, 1.29%, and 1.90%, respectively.
Higher US T-bond yields, weighing on silver
The US 10-year Treasury yield is rising four basis points (bps), sitting at 1.522%, weighing on the white metal price, as higher bond yields mean higher real yields, hurting the prospects of non-yielding assets, like gold and silver. In the meantime, the US Dollar Index (DXY), which tracks the buck’s performance against its peers, is up 0.13%, currently at 93.93.
XAG/USD Price Forecast: Technical outlook
In a daily chart, XAG/USD is trading below the daily moving averages (DMA’s), suggesting that silver is in a downtrend. However, the bounce off at $21.00 on a positive divergence between price action and momentum indicator like the Relative Strength Index (RSI) spurred an upside move capped around $22.60, which was previously tested unsuccessfully six times. Additionally, the presence of a bullish-piercing candle pattern exerted further upward pressure on the move.
A daily close above $22.60 could open the door for further gains. The first resistance would be $23.00. A break above the latter would expose key support supply levels. The 50-day moving average (DMA) at $23.69, followed by the September 10 high at $24.29.
On the other hand, failure at $22.60 could pave the way to a fall towards the 2021 year lows around $21.00, but it will find some hurdles on the way down. The first demand zone would be $22.00. A breach beneath that level would expose essential demand areas at $21.42, followed by $21.00.
The Relative Strength Index (RSI) is at 44, slightly down, suggesting downward pressure still on the white metal and could trigger another leg down.
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.