- Silver has stabilised around $24.80 in recent trade despite further upside for US equities and bond yields.
- Geopolitical risks remain elevated as Russo-Ukraine war continues and Western leaders sound the alarm about potential Russian chemical weapons attacks.
- For now, support at $24.50 is holding, but a bearish break could see the 200 and 50DMAs at $24.00 tested.
Spot silver (XAG/USD) prices have stabilised in recent trade in the $24.80 area having dipped as low as the $24.50s earlier in the day, despite global equities and bond yields continuing to push higher, usually a double whammy for precious metals. In fairness, XAG/USD prices are still trading down by about 1.5% on the day. But it appears that against the backdrop of still very much elevated energy and other commodity prices (that is keeping stagflation fears alive), the bears werent yet ready to push the precious metal below last week’s lows in the $24.50 area.
Indeed, geopolitical risks remain elevated as the Russo-Ukraine war rumbles on and Western leaders sound the alarm about potential Russian chemical weapons attacks that could be used to break the current deadlock. Such a move would further accelerate the imposition of ever-harsher Western sanctions on Russia, with the EU now leaning towards a blanket Russian oil import ban. But this week’s further hawkish shift from Fed Chair Jerome Powell who stoked expectations that the Fed might hike rates by more than 25bps at upcoming meetings seems to have overridden geopolitical concerns for now.
Indeed, there has been a lot of focus on the recent resultant sharp upside seen across US and global yields, which has increased the opportunity cost of holding non-yielding assets like silver. Should recent upside yield moves continue, and should risk appetite in the equity space also remain healthy as has (to the surprise of many) been the case over the past week or so, a bearish break in XAG/USD is likely. The next major support below $24.50 is the 200 and 50-Day Moving Averages in the $24.00 area.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
AUD/USD remains vulnerable near 26-month low amid bullish USD
AUD/USD holds steady above the 0.6200 mark on Friday, though it remains close to its lowest level since October 2022 touched the previous day. The USD hovers near a two-year top on the back of the Fed's hawkish signal and a weaker risk tone. Furthermore, the RBA's dovish shift, concerns about China's economic recovery and trade war fears undermine the Aussie.
USD/JPY advances to a five-week high, around 158.00 neighborhood
USD/JPY hit a five-month top on Friday in the wake of the Fed's hawkish outlook and the BoJ's decision to keep interest rates steady. Bulls largely shrugged off data showing that Japan's National CPI rose in November, which bodes well for an additional interest rate hike by the BoJ.
Gold price oscillates in a range below $2,600 amid mixed cues
Gold price consolidates below the $2,600 mark following the previous day's good two-way price move and remains close to over a one-month low. The Fed signaled a cautious path of policy easing next year, which remains supportive of elevated US bond yields and assists the USD in standing firm near a two-year high.
Bitcoin's trajectory shows similarities with previous cycles as long-term holders book profits of $2.1 billion
Glassnode's Week on Chain report revealed the similarities between the current Bitcoin uptrend and previous cycles amid changing market conditions. Meanwhile, long-term investors began distributing their tokens at the $100K level, culminating in a new all-time high of $2.1 billion in realized profits.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
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.