- Summary:
- Silver price recently met a target of $23.69 after a strong rally but is currently undergoing a pullback.
- This pullback is attributed to a surge in the 10-year bond yield, reaching its highest level since 2007, causing a correction in precious metals.
- Investors are monitoring key US economic data before an upcoming FOMC meeting, which will decide on interest rates, and key technical levels for Silver include $23.6 as resistance and $22.15 as support, with potential geopolitical factors affecting the market.
In my last Silver price analysis, I mentioned my price target of $23. This target was perfectly met last week as the price surged to $23.69. However, after a remarkable rally from the October lows the Gold and Silver prices are finally taking a breather.
On Monday, the XAG/USD pair is having a pullback. At press time, Silver price per ounce is down 0.7% since the start of the first trading session of this week. Gold is also showing a similar price action and has entered into a correction. This correction in precious metals can be attributed to the soaring 10-year bond yield which surged 1.71% today.
Investors are awaiting the key US economic data this week before speculating on the upcoming FOMC meeting. This meeting will take a decision on the interest rates in the country on 1st November.
The bond yield on the 10-year treasury bills has soared above 5%. This is the highest level since 2007 and is a major reason behind today’s pullback in precious metals. According to many analysts, the current yield levels are unsustainable and may result in a major economic event.
Nevertheless, Silver price remains in its local uptrend despite a low timeframe pullback. The ongoing correction can be explained by performing technical analysis on the daily chart.
Silver Price Technical Analysis
On a daily timeframe, $23.6 remains the biggest resistance for the XAG/USD pair. This level comes from the confluence of the 200 MA with a major supply zone. A clear break above this level will make the Silver price prediction very bullish.
Another major level to keep an eye on is the $22.15 level, which is a strong support level. If this level gets broken once again, the outlook will flip bearish for me. The rising tensions in the Middle East and a ground invasion of Gaza may act as a catalyst for such a move.
