XAG/USD remains firm around $22.20, ahead of US CPI
- Silver posts gains of 1.43% for the week.
- Sentiment is mixed as the Asian session begins, US Treasury and greenback yields fall.
- US Treasury Secretary Yellen blames inflation on Russia’s invasion of Ukraine, although she acknowledges that inflation was not “temporary”.
- Silver Price Prediction (XAG/USD): Break above $22.50 to open the door towards $23.20.
Silver (XAG/USD) posted decent gains of 0.08% at the start of the Asian trading session, after Tuesday’s trading session when the white metal posted gains of 0.70%. XAG/USD is trading at $22.23 at the time of writing.
Asian stock futures are mixed ahead of Wednesday’s trading day. Wall Street ended with decent gains amid choppy trading conditions buoyed by falling US Treasury yields and a weaker US dollar. The US benchmark 10-year interest rate closed at 2.979%, below the 3% threshold, and the US Dollar Index, a measure of the dollar’s value, is down 0.08% to 102.331.
In the commodities complex, XAG/USD benefited from a weak greenback. It is worth noting that the precious metals rose in tandem, driven by the above factors.
Investors’ focus is starting to shift to the US inflation numbers released on Friday. Last week’s Nonfarm Payrolls report showed that the US economy is far from slowing, despite the contraction in first-quarter GDP. The ISM Purchasing Managers’ Indices also remain in expansionary territory, although they have eased somewhat.
Meanwhile, US Treasury Secretary Janet Yellen said inflation is likely to remain high in an appearance with lawmakers on Tuesday. While Republicans blamed US President Biden’s American Rescue Plan (ARP), Yellen said that “in almost every developed country in the world we see high inflation and they have very different fiscal policies.” She added that Russia’s invasion of Ukraine is having an impact on energy and food prices around the world.
Elsewhere, the World Bank cut its 2022 global growth forecast to 2.9% from 4.1% in January and reported that growth in the developed world could slow to 2.6%.
Silver Price Prediction (XAG/USD): Technical Outlook
XAG/USD remains bearish as indicated by the daily moving averages (DMAs). But the correction from year-to-date lows near $20.40 to $22.50 could open the door for further gains and target the confluence of the 50-day moving average (DMA) and daily low from Feb. 11th, which is at $ 23.08 has become resistance .
Therefore, XAG/USD initial resistance would be the daily high of June 6th at $22.51. Breaching the latter would reveal the aforementioned confluence at around $23.08. Once cleared, XAG/USD’s next supply zone would be the daily high of May 5 at $23.28.