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Silver Price Analysis: XAG/USD trims losses, boosted by falling US yields

  • The XAG/USD pair found support at a low around $22.30 and then rose towards $22.65.
  • After recovering on Monday, US Treasury yields resumed their decline.
  • The strength of the USD limits the increases.

In Tuesday’s session, the price of Silver XAG/USD It trimmed most of its daily losses after bottoming at a low of $22.30 and then rallying back to $22.65. There were no relevant increases during the session, and the metal’s price dynamics were marked by the fall in US yields, which benefited the metal.

Along these lines, the 2.5 and 10-year yields fell to 4.90%, 4.52% and 4.54%, but remained at lows of more than a month. These rates appear to reflect moderate bets on the Federal Reserve (Fed) following last week’s decision, in which markets perceived signs that the entity is approaching the end of its tightening cycle. Additionally, weak Non-Farm Payrolls numbers reported on Friday compounded the decline, further benefiting the non-performing metal price.

Market attention shifts to next week’s inflation data in the US, where markets expect the Consumer Price Index (CPI) to have slowed in October. In this sense, dovish numbers could trigger new dovish bets from the Fed, which could weaken the US dollar and boost the price of Silver. At the moment, CME’s FedWatch tool indicates that the odds of a 25 basis point hike at the Fed’s next December meeting have dropped to almost 10%.

XAG/USD Levels to watch

When analyzing the daily chart, bearish sentiment is evident for the short term for XAG/USD. The Relative Strength Index (RSI) is below its midline in negative territory, exhibiting a southward trajectory that aligns with a negative indication of the Moving Average Convergence Divergence (MACD), as evidenced by the presence of bars red, underscoring the growing bearish momentum. On the other hand, the pair is below the 20,100-day and 200-day SMA, highlighting the continued dominance of the bears on a broader scale, requiring buyers to take action. That said, fundamentals could reignite bullish momentum should it align with the Fed’s dovish rhetoric.

Support levels: $22.30, $22.15, $22.00.

Resistance levels: $22.85 (20-day SMA), $23.15-30 (100- and 200-day SMA convergence), $23.50.

XAG/USD Daily Chart

XAG/USD

Overview
Latest price today 22.63
Today Daily Change 0.01
Today’s daily variation 0.04
Today’s daily opening 22.62
Trends
daily SMA20 22.84
daily SMA50 22.81
SMA100 daily 23.19
SMA200 daily 23.27
Levels
Previous daily high 23.08
Previous daily low 22.43
Previous weekly high 23.61
Previous weekly low 22.54
Previous Monthly High 23.7
Previous monthly low 20.68
Daily Fibonacci 38.2 22.68
Fibonacci 61.8% daily 22.83
Daily Pivot Point S1 22.34
Daily Pivot Point S2 22.06
Daily Pivot Point S3 21.69
Daily Pivot Point R1 22.99
Daily Pivot Point R2 23.36
Daily Pivot Point R3 23.64

Source: Fx Street

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