- XAG / USD recovers $ 24.00 on the general weakness of the US dollar.
- Market sentiment is slightly negative, illustrated by US stocks, with only the Dow Jones rising.
- XAG / USD: From a technical standpoint, silver is trending higher, but with risky events looming, caution is in order.
Silver (XAG / USD) edged up during the New York session, gaining 0.60%, trading at $ 24.00 at the time of writing. A weaker greenback despite higher yields on U.S. Treasury bonds, with the 10-year note rising two and a half basis points to 1.579%, boosting the precious metal, as is gold, which is also up 0. 65% at time of printing.
Market sentiment is mixed as US stock indices fluctuate between winners and losers amid absent European traders as the Eurozone watches a vacation. In addition, inflation has been the trend for the past two weeks.
This week, three major central bank monetary policy meetings would give investors a broad overview of policymakers, which could stimulate the movement of money. If policymakers view inflation as temporary, this could trigger the purchase of safe-haven assets as an inflation hedge, as it would signal central banks to prolong the easy money cycle. On the flip side, a hawkish tone from the Reserve Bank of Australia, Federal Reserve and Bank of England could push yields higher, weakening XAG / USD.
XAG / USD price prediction: technical outlook
4 hour graph
The silver price has broken below a bullish support trendline, which has now turned into resistance, which would stimulate a bearish signal, but as of press time XAG / USD is pushing to regain the upper hand. Additionally, a bullish flag was broken on the upside, confirming the bullish bias.
Nonetheless, the confluence of the ascending trendline and the $ 50 simple moving average at $ 24.14 would provide strong resistance to the XAG / USD bulls, which would need a break above the latter to stimulate a bullish move to Oct 22 high at $ 24.80.
On the flip side, a failure at the level mentioned above could cause silver to drop towards the Simple Moving Average (SMA) at $ 23.60.
The Relative Strength Index (RSI), although slightly flattened at 49, suggests a downward bias, but there is a slight positive divergence, meaning the price is trending higher.