Silver Price Forecast: XAG/USD falls for three straight days but clings to $24.50s amidst high US yields

  • In the North American session, the white metal slides almost 0.50% on high US yields and a positive market mood.
  • Germany and France expel Russian diplomats as a response to the Bucha killing.
  • Silver Price Forecast (XAG/USD): The bias is neutral upwards, but caution is warranted due to the closeness of the 200-DMA.

Silver (XAG/USD) extends its fall to three-consecutive trading sessions, struggling to get to the $25.00 mark, weighed by rising US Treasury yields and an upbeat market mood, despite the escalation of the Russia-Ukraine conflict. At the time of writing, XAG/USD is trading at $24.50.

As reflected by European and US equities, an upbeat market mood weighs on the safe-haven status of the non-yielding metal. The Russia-Ukraine conflict further escalates after Ukrainian forces found that Russia’s army had killed 410 unarmed people in the city of Bucha. Europe’s response came at the expulsion of Russian diplomatics in German and France, as Europe weighed the possibility of an energy-oil embargo on Russia.

In the US, President Biden said that Vladimir Putin could face a war crimes trial and vowed Washington would impose another tranche of sanctions against Russia.

In the meantime, US Treasury yields are rising, portraying the Federal Reserve’s hawkishness of late, as some officials expressed the possibility of 50-bps hikes. The US 10-year Treasury yield gains four basis points, sits at 2.421%, a tailwind for the greenback, which, as shown by the US Dollar Index, remains buoyant, up 0.38%, at the 99.000 mark.

The US economic docket unveiled Factory Orders for February on a monthly basis, which came at -0.5% as estimated but trailed January’s 1.5% reading. The economic calendar would feature more Fed speaking on Tuesday and Wednesday’s FOMC minutes.

Silver Price Forecast (XAG/USD): Technical outlook

XAG/USD’s bias is upwards, though, in the last three trading sessions, a series of subsequent lower highs/lows sent silver towards the 50-day moving average (DMA) at $24.33, a solid line of defense for XAG bulls, lifting the white-metal to the $24.30s area.

Upwards, the XAG/USD’s first resistance would be April 1 daily high at $24.86. A breach of the latter would expose the $25.00 figure, followed by November 16, 2021, a $25.40 daily high, and then August 4, a daily high at $26.00.

On the flip side, XAG/USD’s first support would be the 50-DMA at $24.33. Once cleared, the following demand zone would be $24.00, followed by the 200-DMA at $23.94.

Technical levels to watch

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