XAG / USD plunges to $ 23.30 as US bond yields continue to rise
- XAG / USD dips for second consecutive day broke below $ 24.00.
- Higher US T-bond yields rise towards 1.646% and strengthen the greenback.
- XAG / USD: Failure to reclaim $ 23.53 opens the door for another downtrend towards $ 23.00.
Silver (XAG / USD) crashes 2.98% during the New York session and was trading at $ 23.44 at the time of writing. In the night session, the white metal failed to break resistance above $ 24.30 and then plunged towards $ 24.00, falling further as the European session began, hitting a daily low of $ 23.34.
It appears that market participants have been waiting for the renomination of Federal Reserve Chairman Jerome Powell. US Treasury bond yields are rising, with 10-year US T-bond yields rising two basis points to 1.646% high at 96.61, and US stocks falling, with the exception of the Dow Jones Industrial which is down by 0, 16% has increased.
Now that the market is confident that the US Federal Reserve will have continuity in its monetary policy, the US dollar extended its rally on Tuesday. According to sources cited by Bloomberg, “the market has liquidated insurance against a rather ‘deaf’ shift in staff”.
Meanwhile, the 3-month Eurodollar money market futures (a proxy for where markets are expecting the federal funds rate in December) fell 10 points during its week to hit 98.95, the lowest point of the year . The market has priced in 80 basis points of tightening for the next year and is expecting at least three 25 basis points.
On the macro front, the US economic list included the IHS Markit PMIs for November. The PMI for manufacturing was 59.1, a tick higher than 59, while Services and Composite rose to 57 and 56.5, respectively, lower than expected. Additionally, the Richmond Fed Manufacturing Index rose to 11 for November, better than the expected five.
XAG / USD Price Prediction: Technical Outlook
Silver (XAG / USD) has a downward trend which is represented by the daily moving averages (DMA’s) above the spot price. Also, the Relative Strength Index (RSI), a momentum indicator, is below the 50 centerline and targets 40, accelerating its decline, giving XAG / USD one more move down towards the Nov 3rd low at 23 .02 $ could put.
On the flip side, if the silver bulls hold the price above the 50-DMA at $ 23.53, the non-yielding metal could stabilize within the $ 23.50 to $ 24.00 range.