XAG / USD breaks the 100 DMA at around $ 24.40 on falling real yiels

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  • XAG / USD rises above the 100 DMA for the third day in a row.
  • Fed Vice President Clarida: The benchmark for higher rates could be reached by the end of 2022.
  • Fed Vice President Clarida: The Fed is still “some way” away from a rate hike.
  • XAG / USD: Bull’s target is at $ 24.60 before launching an attack towards $ 25.00.

Silver (XAG / USD) is rising sharply for the third straight day, around 1.05%, trading at $ 24.40 during the New York session at the time of writing. Additionally, it is printing a two-week high amid higher US T-bond yields, with 10-year government bond yields at 1.49%, up nearly four basis points in the session.

Silver is rising, boosted by falling real yields

Typically, higher US Treasury bond yields have an inverse correlation with precious metals like gold or silver, but at the time of writing what affects them is the rise in XAG / USD is real yields. As Joel Frank, FX Street analyst, commented in his article Gold Price Analysis: XAU / USD Reaches Two-Month Highs Over $ 1,820 While Real Yields Are Falling, he commented that “US real yields fell sharply last week , continued down on Monday, with 10-year TIPS yields falling about 2 basis points and back below -1.10% during the session. Real returns are interest rates minus inflation, but as TIPS returns decline, investors could expect higher precious metals prices. In addition, inflation expectations in the US are rising slightly, which increases the appetite for precious metals as inflation protection.

Meanwhile, the US dollar index, which tracks the performance of the greenback versus a basket of six competitors, is down 0.14% to hit 94.08, fueling the appetite for the relentless metal.

During the day, some fedspeakers crossed the cables. One of the most relevant, Vice Chairman Richard Clarida, said the benchmark for higher rates could be reached by the end of 2022, but reiterated that the Fed was “some way” away from a rate hike, according to Reuters. It also noted that “core PCE inflation, measured since February 2020, before the pandemic, averages 2.8% by September 2021”.

XAG / USD Price Prediction: Technical Outlook

On the daily chart, XAG / USD just broke the 100-day moving average (DMA) at $ 24.16 and closed on the center line of Andrew Pitchfork’s indicator around the $ 24.60 area. A daily close above the latter could push the white metal higher as it is the September 5th high at $ 24.85, its first resistance level. A sustained break above this level would expose the 200 DMA at $ 25.35.

On the flip side, a failure on the central line of Pitchfork would reveal the 100-DMA as the first support, followed by the $ 24.00 figure.


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