Silver rallies back toward $ 27.00 as USD takes a hit

• Silver spot prices have recovered from a brief dip below $ 26.00 towards $ 27.00 amid a weakening of the USD.
• A busy week is coming in terms of US economic events and silver could be swinging.

Silver Spot Prices (XAG / USD) They have been at the forefront since the start of the European session on Tuesday, recovering from a brief dip below the $ 26.00 level to return to trading above $ 26.00, driven by a weaker US dollar. Some market commentators have cited FOMC member Lael Brainard’s dovish comments weighing on the dollar since the Asia Pacific session highs, but most market traders / commentators attribute the drop to positioning before a Busy rest of the week in terms of US data Unsurprisingly, the weaker US dollar has offered tailwinds to precious metals, with spot silver rising roughly 20 cents on the day and currently trading around of $ 26.75, not far from Monday’s highs just above $ 27.00.

Performance of the day

Influential FOMC member Lael Brainard spoke in a webinar early in the session and made some interesting comments on recent bond market movements; He noted that last week’s bond market movement caught his attention and commented that if there was a persistent tightening of financial conditions, this could slow progress towards employment and inflation targets.

In the above scenario (where yields continue to rise but then the Fed steps in with more QE), the impact on precious metals like silver would be difficult to measure; On the one hand, higher yields would have a negative impact, but on the other, further expansion of the Fed’s balance sheet would have a positive impact.

Again, although some market commentators have cited the above as a peso to the US dollar (and one that benefits the likes of silver), it is much more likely that the markets are positioning ahead of the key economic events of the USA Later in the week; The February ISM Services PMI report is released on Wednesday, a timely update on the state of the US service sector recovery, as well as the February ADP National Employment Change estimate, a publication that helps set expectations for the NFP release later in the week. Thursday sees Fed Chairman Jerome Powell (expected to reiterate the Fed’s dovish script while now showing any concerns about rising bond yields) plus weekly jobless claims figures and on Friday it is released the February Labor Market Report, which will be the main event of the week from a global macro perspective. Silver prices are likely to vary based on the USD.

Technical levels