- XAG/USD declined by 0.90% to the $22.80 area.
- Headline CPI from the US from August rose to 3.7% YoY, beating expectations.
- US yields retreated but remain uncomfortably high for precious metals.
In Wednesday’s session, Silver prices retreated and failed to consolidate above $23.00, falling to the $22.80 area. After fresh inflation figures from the US, the Greenback is holding its foot trading strong against its rivals while US Treasury yields are consolidating after initially spiking to a two-week high.
The US Bureau of Labour Statistics (BLS) revealed that the Consumer Price Index (CPI) rose to 3.7% YoY, up from 3.2% in July and beating the expected 3.6%. On the other hand, the Core measure decelerated to 4.3% from its previous reading of 4.7%, as markets expected.
In the meantime, the US 2,5 and 10-year bond yields saw a volatile action during the session, spiking after the release of the inflation figures and declining, seeing daily decreases of more than 0.50%. However, they still remain high, indicating that investors are still confident that the Federal Reserve (Fed) will hike one more time in 2023, and the CME FedWatch tool suggests that market swaps are discounting nearly 40% odds of a hike in November or December. In that sense, as yields remain high and hawkish bets on the Fed steady, the XAG/USD’s bulls will have a hard time as their upside potential will be limited.
On Thursday, the BLS will report Producer Price Index (PPI) figures from August, providing additional insights to investors to place their bets on the next Fed meetings.
XAG/USD Levels to watch
The technical outlook for the XAG/USD indicates an oversold condition in the short term, suggesting a potential technical rebound in the near future. The Relative Strength Index (RSI) exhibits a negative slope below the 50 thresholds, while the Moving Average Convergence (MACD) histogram, displays larger red bars. Also, the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), highlighting the continued dominance of bears on the broader scale. To add to that, the moving averages seem to be converging towards the $23.50 and are building a strong resistance at that area.
Support levels:$22.60, $22.40, $22.00.
Resistance levels: $23.00, $23.50 (200-day SMA), $23.60 (20-day SMA).
XAG/USD Daily Chart
-638302356379797855.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.