XAG/USD is facing a strong resistance at the confluence of the 50/100 DMA
- Silver is the only one up 0.08% in the precious metals segment.
- Mixed US macro data is ignored by US Dollar buyers, DXY falls 0.20%.
- XAG/USD Technical Outlook: Neutral bearish, per DMAs above spot.
Silver (XAG/USD) is up about 0.08% for the third straight day, trading at $23.14 at the time of writing. The white metal is the only precious metal to gain in the session as Gold falls about 0.34% while Platinum and Cooper fall 0.39% and 0.60% respectively.
Meanwhile, the US Dollar Index (DXY), a measure of the greenback’s value against a basket of other peers, slipped 0.20% to 94.722, although US Treasury yields are unchanged at 1.727% .
US macro data came out mixed
Before Wall Street opened, the US Economy List contained initial jobless claims for the week ended January 7th. The reading came in at 230,000, higher than the 200,000 forecast, while the December Producer Price Index (PPI), which measures prices paid for producers, rose 9.7%, although little less than the 9.6% estimated on a yearly basis, a figure , contradicting the US Consumer Price Index (CPI) revealed on Wednesday, which showed US consumer inflation rose 7.0%, the highest level since 1982.
Fed spokesmen continue to cross the news lines
The Fed speech parade continued on Thursday. Philadelphia Fed Chairman Patrick Harker agreed with other policymakers who have three rate hikes planned for 2022, although Harker noted he is open to a fourth. He said the Fed needs to act faster than the previous quantitative tightening in terms of balance sheet shrinking.
In the same tone, Fed Vice Chairwoman nominee Lael Brainard said the Federal Reserve could hike as early as March to ensure the Fed would tame inflation towards the Fed’s target level. She said: “The committee has planned several hikes throughout the year.”
Meanwhile, Richmond Fed President Thomas Barkin said the labor shortage “could be a protracted phenomenon.” Barkin noted that if the US Federal Reserve trims the balance sheet down to normal levels, it will affect reserves.
XAG/USD Price Prediction: Technical Outlook
XAG/USD is neutral-bearish from a technical analysis perspective. This is because the spot price remains below the daily moving averages (DMAs) which are bearish aligned with the shorter timeframes below the longer timeframes.
However, as of press time, the unyielding metal is facing stiff resistance at the confluence of the 100- and 50-DMA, which sit at $23.29 and $23.30, respectively.
On the upside, the first level of support would be the psychological $23.00. A break of the latter would take December 29, 2021 to a low of $22.59, followed by $22.00.