Silver Price Forecasts: XAG/USD holds below $64.00 amid Fed hiking bets, higher yields
- XAG/USD treads water below $64.00, on track for a 3.7% weekly decline.
- High US Treasury yields and rising Fed tightening bets have crushed precious metals this week.
- Fed's Paulson and Williams hint at a further interest rate hike before the end of the year.
Silver (XAG/USD) is trading sideways on Friday, with upside attempts capped below $64.00, on track for a 3.7% weekly decline, and with bears looking at the bottom of the monthly trading range, at $62.30. Precious metals have struggled this week with US Treasury yields surging across the curve, and Federal Reserve (Fed) officials calling for further interest rate hikes in the coming months.
A mix of strong US business activity, rising inflationary pressures amid higher Oil prices, and concerns about the ballooning US government debt has pushed US Treasury yields to multi-year highs this week, posing a heavy weight on the yieldless precious metals.
Beyond that, Fed policymakers delivered a hawkish message this week, endorsing market hopes of further rate hikes over the coming months. Philadelphia Fed President Anna Paulson affirmed earlier on Friday that “modest” rate moves are likely to be needed to bring inflation to target, only a few hours after the New York Fed President John Williams affirmed that “it is sensible to expect another rate increase by year-end.”
Technical Analysis: Support at the $62.30 area has come into view
XAG/USD trades at $63.81, keeping a bearish near-term tone as it sits at a short distance from the bottom of the monthly trading range, in the area between $62.20 and $62.30. Momentum indicators in the daily chart reinforce the bearish view, as the Relative Strength Index (14) stays in neutral-to-soft territory, while the Moving Average Convergence Divergence (MACD) indicator holds in negative values, hinting that downside pressure prevails.
A break of the mentioned $62-20--$62.30 area (August 10, September 16 lows) would activate a bearish Head & Shoulders (H&S) pattern, adding pressure towards the August 6 low at $60.87 and the August 5 low at the $59.35 area.
On the topside, initial resistance is located at the $64.60 area (September 22 low) ahead of the range top, just above $68.00, which has capped upside attempts several times this month.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.89% | 1.23% | 0.77% | 1.14% | 1.30% | 1.00% | 0.75% | |
| EUR | -0.89% | 0.36% | -0.07% | 0.25% | 0.42% | 0.12% | -0.13% | |
| GBP | -1.23% | -0.36% | -0.54% | -0.10% | 0.06% | -0.24% | -0.49% | |
| JPY | -0.77% | 0.07% | 0.54% | 0.40% | 0.51% | 0.24% | -0.01% | |
| CAD | -1.14% | -0.25% | 0.10% | -0.40% | 0.22% | -0.16% | -0.38% | |
| AUD | -1.30% | -0.42% | -0.06% | -0.51% | -0.22% | -0.30% | -0.61% | |
| NZD | -1.00% | -0.12% | 0.24% | -0.24% | 0.16% | 0.30% | -0.25% | |
| CHF | -0.75% | 0.13% | 0.49% | 0.01% | 0.38% | 0.61% | 0.25% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
