Silver Price Analysis: XAG/USD soars by more than 2% to close the week

Silver Price Analysis: XAG/USD soars by more than 2% to close the week
  • XAG/USD advanced by 2.20% to $23.20.
  • The USD is trading somewhat soft on Friday ahead of the weekend.
  • US yields and tightening expectations remain steady. 
  • Michigan Consumer Sentiment from September declined to 67.7.

At the end of the week, the XAG/USD Silver Spot price gained significant demand and increased to $23.15. On the US Dollar side, it’s consolidating, but its DXY index continues to trade at multi-month highs. Attention is now set on the Federal Reserve (Fed) decision next week, and markets remaining cautious seem to benefit the grey metal.

According to the CME FedWatch tool, a pause is practically priced in, but investors bets on the November and December meetings determine the Greenback’s price dynamics. Fundamentally, Fed officials have the green light to hike on more time as the economy hasn’t cooled down, and Chair Powell stated that ongoing decisions will be carefully decided according to the incoming data. So far, inflation accelerated in August, and economic activity is holding firm, so the Fed may have one more hike up their sleeves.

On the data front, the University of Michigan reported that September’s Consumer Sentiment Index declined to 67.7, lower than the expected and previous figures of 69.1 and 69.5, respectively. The initial reaction was a decline in the DXY index from 105.30 to 105.15. US Treasury yields on the 2,5 and 10-year bonds are holding firm at 5.03%, 4.40% and 4.30%, cushioning the Greenback’s losses and limiting the XAG/USD’s potential.

XAG/USD Levels to watch 

 Analysing the daily chart, it is apparent that the XAG/USD has a neutral to bullish technical stance, with the bulls gradually recovering ground. The Relative Strength Index (RSI) displays an ascending slope in the bearish territory, hinting at a potential trend reversal, while the Moving Average Convergence (MACD) exhibits decreasing red bars. However, the price is below the 20,100 and 200-day Simple Moving Averages (SMAs), suggesting that the buyers are struggling to overcome the overall bearish trend and the bears are still in charge.

 Support levels: $23.00, $22.90, $22.70. 

 Resistance levels: $23.30-70 (20,100,200-day SMA convergence)

 XAG/USD Daily Chart

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *