- Market sentiment is bullish, triggering a move from safe haven assets to riskier ones.
- Rising yields on US T bonds are boosting the greenback while weakening unproductive money.
- A positive divergence and a bullish breakthrough pattern on a daily chart triggered the move towards $ 22.60.
Silver (XAG / USD) slips for the first day of four, trading at $ 22.62, down 0.25% on the day at the time of writing. Investors’ risk appetite is in risk mode, illustrated by the price movement of US stock indices, with the S & P500, the Dow Jones and the Nasdaq posting gains of 1.48%, 1.29% and 1, 90%, respectively.
US T bond yields rise, weighing on silver
The 10-year US Treasury yield rises four basis points (bps) to 1.522%, weighing on the price of the white metal as higher bond yields mean higher real yields, hurting the outlook for the white metal. non-productive assets, like gold and silver. Meanwhile, the US Dollar Index (DXY), which tracks the performance of the dollar against its peers, is up 0.13%, currently at 93.93.
XAG / USD Price Prediction: Technical Outlook
In a daily chart, XAG / USD is trading below the Daily Moving Averages (DMA), suggesting that silver is in a downtrend. However, the rebound to $ 21.00 on a positive divergence between price action and momentum indicator like the Relative Strength Index (RSI) spurred a bullish move capped around $ 22.60, which had already been tested six times without success. Additionally, the presence of a bullish piercing candle pattern put additional upward pressure on the move.
A daily close above $ 22.60 could open the door for further gains. The first resistance would be $ 23.00. A break above the latter would expose the main levels of support supply. The 50-day moving average (DMA) at $ 23.69, followed by the September 10 high at $ 24.29.
On the flip side, a failure at $ 22.60 could pave the way for a dip to 2021 year lows around $ 21.00, but it will meet some obstacles on the way down. The first claim area would be $ 22.00. A breach below this level would expose critical demand areas at $ 21.42, followed by $ 21.00.
The Relative Strength Index (RSI) is at 44, slightly lower, suggesting downward pressure still on the white metal and could trigger another decline.