- Summary:
- The rise in US 10-year bond yields has caused a retreat in silver prices on the XAG/USD chart, but new buying pressure at $25 keeps the downside limited.
A rebound in US long-term bond yields and higher-than-expected producer price index numbers combined to strengthen the greenback and set back silver prices (XAG/USD). This Friday, spot silver found itself trading 0.62% lower, before renewed buying interest at the $25 mark prevented a further decline.
Once more, the situation with the US government bonds is the dominant fundamental influence on silver prices, as rising bond yields cause capital flight from the non-yielding silver asset to bonds with climbing yields. The US 10-year Treasury note rose more than 2% on the day and this proved to be a catalyst for silver prices to take a breather.
The higher-than-expected rise in the PPI could bring more focus on the Consumer Price Index data, scheduled for release next week.
Higher consumer inflation could set off a further increase in bond yields, which could put more pressure on silver prices.
Silver Prices (XAG/USD) Technical Levels of Note
Today’s decline indicates that the resistance at the 25.386 price level held firm. This prompted the pullback to the downside which found intraday support at the 25.000 psychological price level.
This keeps silver prices on the path to a higher ending for the week, with progressively higher lows on the daily candles. If the 25.386 resistance is uncapped, 26.034 becomes the logical target. Above this level, 26.325 and 26.868 remain the only barriers between bulls and the 27.00 mark.
On the other hand, a lower close below 27.00 allows bears to initiate a push towards the 24.569 support, with the support zone that has the 24.000 psychological price level as its ceiling standing by as an additional target to the south. 23.164 and 22.549 become additional targets once the support zone succumbs to bearish pressure.
Silver Prices (XAG/USD) Daily Chart
