Silver Price Analysis: XAG/USD consolidates gains, still outlook looks bright

The XAG/USD surged to a daily high of $24.15 and then settled at $23.70.
Dovish bets on the Fed weight on the US Dollar and yields favouring the metal.
Fed’s Susan Collins warned markets that tightening may not be over.

Patricio Martín FXStreet

The XAG/USD surged to a high above $24.00 on Friday and then settled around $23.70 as investors seemed to be taking profits, still closing a 6% winning week. Dovish bets on the Federal Reserve (Fed) put pressure on the US Dollar and in US yields, allowing the metal to find demand.

Markets responded positively to signs of cooling in the US Consumer Price Index (CPI), interpreting it as an indication that the Federal Reserve (Fed) is close to concluding its hiking cycle, which weakened the US Dollar over the week. In line with that, it benefited the grey metal, which soared today to its highest level since early September as the dovish bets on the Fed triggered a decline in US bond yields, often seen as the cost of holding non-yielding metals.

However, Susan Collins, President of the Federal Reserve Bank of Boston, acknowledged on Friday the favourable financial conditions and welcomed the recent cooling in inflation. However, she did not rule out the possibility of further tightening, which caused some unease in the markets. In the meantime, US bond yields recovered after seeing sharp declines over the week. The 2-year rate stood at 4.91%, while the 5-year and 10-year yields were at 4.46% and 4.45%, respectively.

XAG/USD levels to watch

The daily chart suggests that the XAG/USD holds a bullish technical bias despite indicators turning flat. The Relative Strength Index (RSI) printed a neutral slope above its middle point, while the Moving Average Convergence (MACD) histogram displays stagnant green bars. Considering the broader technical landscape, the pair is above the 20,100,200-day Simple Moving Average (SMA), suggesting that the bulls are also in control of the broader context.

Supports: $23.50, $23.30-20 (100 and 200-day SMA convergence),,$ 23.00.
Resistances: $24.15,$24.30,$24.50.

XAG/USD daily chart

XAG/USD

Overview
Today last price	23.72
Today Daily Change	-0.03
Today Daily Change %	-0.13
Today daily open	23.75

Trends
Daily SMA20	22.94
Daily SMA50	22.68
Daily SMA100	23.21
Daily SMA200	23.27

Levels
Previous Daily High	24.08
Previous Daily Low	23.28
Previous Weekly High	23.26
Previous Weekly Low	22.19
Previous Monthly High	23.7
Previous Monthly Low	20.68
Daily Fibonacci 38.2%	23.78
Daily Fibonacci 61.8%	23.59
Daily Pivot Point S1	23.33
Daily Pivot Point S2	22.91
Daily Pivot Point S3	22.53
Daily Pivot Point R1	24.13
Daily Pivot Point R2	24.5
Daily Pivot Point R3	24.92

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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