Silver Price Forecast: XAGUSD hits 5-month high and trades above the 200-DMA as buyers' eye $22.00

Silver price rallies sharply and is testing the 200-day Exponential Moving Average (EMA) as US Treasury bond yields drop, undermining the American Dollar, on Tuesday amidst a light economic calendar, as US midterm elections get the center spotlight. At the time of typing, the XAGUSD is trading at $21.47 after hitting a fresh 5-month high at $21.62.

Silver price skyrockets as US Treasury yields dip

Wall Street trades in the green, registering gains between 1.16% and 1.48%. The midterm elections in the United States are the main driver of the session, underpinning risk-perceived assets linked to equities rallying after the polls. However, the lack of US economic data until Thursday’s Consumer Price Index (CPI) for October is expected to ease, with headline estimated at 8% and core CPI at 6.5% on annual base readings.

Meanwhile, US Treasury yields, particularly the 10-year benchmark note rate, have decreased from weekly highs of 4.24% to 4.141%. Expectations for the Federal Reserve’s December meeting remain tilted towards hiking 50 bps, as shown by the CME FedWatch Tool at 56.8%. The odds for a 75 bps increase are 43.2%, unchanged from a day ago.

The US Dollar Index, which tracks the buck’s value against a basket of peers, plunges 0.66% and exchanges hands at 109.503, though it should be noted that it has fallen from daily highs at around 110.610.

A light US economic docket revealed the US Redbook Index, which came at 7.6% below its previous reading, while the US IBD/IPP Economic Optimism for November dived from 41.6 to 40.4.

Silver (XAGUSD) Price Analysis: Technical outlook

Silver price is advancing sharply and pierced the 200-day EMA toward hitting the 5-month high at $21.62. Nevertheless, it trimmed some gains, hoovering around the 200-day EMA at $21.48. if XAGUSD buyers achieve a daily close above the latter, the white metal bias will shift upwards, opening the door for further gains. Hence, the XAGUSD’s first resistance would be $22.00, followed b the June 6 swing high at $22.51, followed by the psychological $23.00.