- Precious metals benefited from risk-off market sentiment and lower US Treasury yields, with silver and gold up 1.25% and 0.96% respectively.
- Russia is pressuring to sell gas to non-friendly countries as Putin intends to use the Russian ruble as payment.
- XAG/USD Price Prediction: Golden cross on daily chart paves way for further gains.
Towards the end of the New York session, Silver (XAG/USD) recovered some of its shine as XAG bulls start a rally and reclaim the $25.00 level amid lower yields and risk aversion in financial markets. At the time of writing, XAG/USD is trading at $25.09.
Global equities were higher overnight despite posting losses since the Central European session and through the North American session on muted market sentiment. The clashes between Russia and Ukraine continue to make headlines, although the stance of both parties remains unchanged, so nothing has changed. In connection with this, US President Joe Biden is traveling to the NATO offices in Brussels for a two-day reunion. The US, UK and EU continue to impose sanctions on Russia, which has recently retaliated, Russian President Putin said intend to use Russian rubles when selling gas to non-friendly countries. These comments pushed oil prices higher as WTIs reclaimed $114.00.
As a result, precious metals are rising. Gold (XAU/USD) was also up nearly 1% on the day to $1939.52 a troy ounce, while the sell-off in US Treasuries faltered as the 10-year T-Note yield eased from weekly highs and down five bps, down to 2.321%, a tailwind for XAG/USD.
Fed spokesmen are in the foreground
Cleveland Fed Chair Loretta Mester crossed the wires at the start of the New York session. She said the Fed needs to move about 50 basis points this year while frontloading rate hikes to better position itself for the U.S. economy’s trajectory in the second half of 2022. Mester added: “I have no concerns that rate hikes will push the US economy into recession.”
Loretta Mester added her name to the list of Fed officials who have expressed the need for a 50 basis point hike in federal funds interest rates, led by Fed Chair Powell, James Bullard, Raphael Bostic, Chris Waller and Mary Daly.
XAG/USD Price Prediction: Technical Outlook
Silver (XAG/USD) is trending higher, further confirmed by Monday’s trading session. On that day, the 50-day moving average (DMA) rolls over the 200-DMA and forms a golden cross, a bullish signal that, although lagging behind, could open the door for more gains in XAG/USD.
Against this backdrop, XAG/USD first resistance would be Nov 16, 2021, daily high at $25.40. A breach of the latter would reveal the daily high of August 4, 2021 at $26.00, followed by July 16, 2021 at $26.45.
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