Silver Price Analysis: XAG/USD consolidates gains, but outlook remains encouraging

• XAG/USD rose to a daily high of $24.15 and then settled at $23.70.
• Dovish bets on the Fed weighed on the dollar and yields, favoring metals.
• The Fed’s Susan Collins warned markets that the tightening of monetary policy may not be over.

He XAG/USD It peaked above $24.00 on Friday and then stabilized around $23.70 as investors appeared to be taking profits, although it closed a week with 6% gains. Dovish bets from the Federal Reserve (Fed) pressured the Dollar and US yields, allowing metals 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 hike cycle, which weakened the Dollar during the week. In line with this, it benefited the gray metal, which today soared to its highest level since early September, as the Fed’s dovish bets caused a decline in US bond yields, often seen as the cost of keep metals without performance.

However, Susan Collins, President of the Federal Reserve Bank of Boston, on Friday acknowledged the favorable financial conditions and welcomed the recent cooling of inflation. However, she did not rule out the possibility of further tightening, causing some concern in the markets. Meanwhile, US bond yields recovered after posting sharp declines during the week. The 2-year yield stood at 4.91%, while the 5-year and 10-year yields stood at 4.46% and 4.45%, respectively.

XAG/USD levels to watch

The daily chart suggests that XAG/USD maintains a bullish technical bias even though the indicators have turned flat. The Relative Strength Index (RSI) printed a neutral slope above its midpoint, while the Moving Average Convergence Histogram (MACD) shows stagnant green bars. Considering the broader technical picture, the pair is above the 20,100,200-day SMA, suggesting that the bulls are also in control of the broader context.

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

XAG/USD daily chart