Silver Price Forecast: XAG/USD seems vulnerable near $60 amid soaring US Treasury Yields
LONDON (October 1) Silver price (XAG/USD) trades with caution near its four-week low at around $60.00 during the European trading session on Thursday. The white metal is broadly under pressure as United States (US) Treasury Yields continue to extend the rally even as traders have trimmed hawkish Federal Reserve (Fed) expectations for the October meeting and Personal Consumption Expenditure (PCE) Price Index data for August arrived lower-than-projected.
10-year US Treasury Yields have hit a fresh two-decade high near 5.3%. Higher yields on interest-bearing assets, diminish the appeal of non-yielding assets, such as Silver.
The CME FedWatch tool shows that the odds of the Fed leaving interest rates unchanged at the policy meeting this month have increased to 62.4% from 29% seen a week ago. Traders dialled bacl hawkish Fed bets after New York Fed Bank President John Williams said that there is no urgency for interest rate cuts.
Contrary to market expectations, analysts at TD Securities said, “We still expect the Fed to lift rates in October, but can't discard a more gradual approach”, arguing that “the underlying trend is the key story,” with “robust growth with rising inflation risks” expected to “continue to dominate the Fed's outlook.” TD Securities added that the latest US PCE and GDP revisions were “a mixed bag,” combining “hawkish backward adjustments to growth and dovish adjustments to inflation.”
Going forward, the next major movement in the Silver price is expected to come from the US Nonfarm Payrolls (NFP) data for September, which will be published on Friday.
Silver Technical Analysis
In the daily chart, XAG/USD trades at $60.38, maintaining a bearish near-term tone as price holds well below the 20-period Exponential Moving Average (EMA) at $63.66. The downside break away from this key dynamic barrier suggests sellers remain in control, while the Relative Strength Index (14) at 38.50 hovers just above oversold territory, hinting at persistent but not yet exhausted bearish momentum.
On the topside, initial resistance is the August 19 low at $62.19 before the 20-period EMA at $63.66 coming into picture as a dynamic barrier. On the downside, the Silver price could slide towards the August 4 low at $58 if it fails to hold $60.00.
FXStreet
