XAG/USD, weighed down by profit-taking ahead of US risk events, could see a six-day winning streak

  • Spot silver pulls back somewhat after hitting a monthly high of $25.80 amid profit taking ahead of US risk events.
  • XAG/USD is trading back in the $25.50 range and is on course to embark on a 6-day winning streak.

Silver (XAG/USD) spot prices are muted, trading lower at $25.50 a troy ounce ahead of March US Retail Sales report at 1330 BST, US Michigan Prelim Consumer Sentiment Survey at 1500 BST and more later from the Fed am Day. US bond yields and the US dollar continue to show some weakness, although profit-taking ahead of upcoming risk events and after the strong performance of the past few days are preventing XAG/USD from further closing the gap to $26.00.

In fact, the precious metal closed in the green for the sixth consecutive day on Wednesday, during which time it has surged more than 6.5% from the low $24.00 to current levels in the upper $25.00. Prices did indeed hit a monthly high earlier in the day at $25.87 so traders should not be too surprised if some profit taking/consolidation is at play.

As for the short-term prospects for silver, chances of a break above $26.00 remain good as long as the recent decline in US yields and the dollar continues. Silver, like other precious metals, is likely to remain in demand for some time given 1) elevated geopolitical risk premiums and 2) increased demand for inflation protection as inflation rates rise globally. That is, unless circumstances change drastically, XAG/USD should remain well supported above the $24.00 level as it has been for the past few weeks.

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