Silver Price Analysis: XAG/USD Faces a Key Test as Yields Swing

Silver Technical Analysis

The silver market continues to see a lot of noisy behavior, and at this point, I think you have to look at this through the prism of a market that is watching the 10-year yield. The 10-year yield breaking above the 4.30 level would be bad and that could open up a significant amount of downward pressure. To the upside, we have the $80 level offering a bit of a barrier; breaking above there then opens up a move toward the $90 level. A drop from here could send silver back down to the $70 level.

Market Volatility and Supply Factors

Ultimately, this is a market that I think will remain very volatile, probably moving on the latest headlines coming out of the war, because that is driving the bond market. Higher yields are toxic for silver. Once we get through all of this in the Middle East, though, we start to focus on the lack of supply. That should be positive for silver. I like silver overall. Trading between $70 and $90 makes some sense for a while and I think that continues to be how we play out. Looks a little squishy at the moment; I might look for a dip to take advantage of some value.

Again, I will be watching that 10-year yield and if it starts to drop, that and a little bit of price action suggesting that silver looks bullish again, I am okay with buying it. But timing will be everything; make sure to pay attention to the bond market and what it is currently doing before buying silver in this environment.

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