Silver Prices Forecast: XAG/USD Reacts to Firm Yields as Traders Await Powell’s Remarks

Highlights

• Silver price reacts to U.S. 10-year Treasury yield increase.
• Jobs data feeds speculation on Fed’s rate hike slowdown.
• Dollar hits six-week low, impacting XAG/USD valuations.
• Silver investors await Powell’s speech for rate clues.

Silver’s Yield-Driven Slide

Spot silver (XAG/USD) began the week on a subdued note as it succumbed to pressures from rising U.S. bond yields overnight, eagerly eyeing Federal Reserve Chair Jerome Powell’s insights into future rate moves. The precious metal’s luster diminished with a 0.25% drop to $23.15 per ounce, retracting after a failed attempt to breach the $23.50 mark.

Yield’s Magnetic Pull

The trajectory of silver prices is closely tethered to the U.S. 10-year Treasury yields, which have recently rebounded from a five-week low to 4.5910%. This climb spells potential trouble for silver, drawing investors away from the non-yielding asset and threatening to push prices below the vital $22.57 support level.

Jobs Report and Monetary Policy

The weaker-than-anticipated jobs report has stirred up market conjecture around a possible halt in the Fed’s aggressive rate hiking pattern, casting the dollar down to a six-week low. The cooling labor market is prompting market players to brace for a rate stabilization as soon as December, with some predicting a policy softening come mid-next year.

Fed’s Communication Crucial for Silver

As Powell prepares to speak, the market’s pulse quickens, with nine Fed officials slated to provide updates. Despite holding rates steady recently, the possibility of future hikes has not been discounted, leaving investors parsing every word for policy direction.home

Silver’s Tentative Optimism

Silver’s immediate outlook seems tentatively positive, betting on a potential pause in rate hikes. Yet, the landscape remains fraught with uncertainties—any surge in Treasury yields or hawkish hints from Fed officials could tilt the balance, putting the key $22.57 support level to the test. As such, the bullish sentiment persists, but with a vigilant eye on central bank cues and economic indicators.

Technical Analysis

The current Daily price of silver (XAG/USD) at 23.14 is marginally below the previous close, indicating a slight bearish inclination in the short term.

It hovers below both the 200-day and 50-day moving averages, set at 23.38 and 22.86 respectively, suggesting a potential consolidation phase as it trades within this range.

The proximity of the price to minor resistance at 23.55 and trend line resistance at 24.06 presents a near-term ceiling that bulls must overcome to shift sentiment.

Conversely, support at 22.23 and 20.66 form crucial thresholds that could stifle bearish momentum if tested.

Without a clear break of these technical levels, the market sentiment appears neutral, awaiting directional cues. A breakout above 23.27 could trigger an acceleration to the upside, while a breakdown under 22.86 could lead to further downside pressure.