- Silver record gains during the week, up 2.78%, despite rising US Treasury yields.
- San Francisco Fed’s President Daly said that the Fed would need to hike more than four times, and looks to hike in March.
- XAG/USD Technical Outlook: Upward biased, as silver bulls prepare an attack towards $25.00.
Silver rally extends to six consecutive trading sessions amid rising tensions in the Russia/Ukraine conflict. At press time, XAG/USD is trading at $24.55.
Two US intelligence officials commented that Russia could invade Ukraine
Ukraine – Russia tensions increase. What started as a “calm” day in the financial markets has taken its toll, as US press via Newsweek expressed that an invasion from Russia could occur within 24/48 hours.
The article said that Ukraine’s President has been warned that Russia “will highly begin an invasion within 48 hours based on US intelligence.” As reported by a US intelligence official, Russia’s invasion would consist of airstrikes, cruise missiles, ground invasion, and cyberattacks.
At press time, the US 10-year Treasury Note yield rises five basis points sits at 1.998%, failing to weigh on the white metal, benefited by heightened tensions in Ukraine.
Appetite for safe-haven assets has increased in the last couple of weeks due to uncertainty in Eastern Ukraine. In the case of silver, the non-yielding metal rose to a four-week high above $24.60, leaving the 200-day moving average (DMA) at $24.24 below.
An absent US economic docket featured San Francisco Fed’s President Mary Daly emphasized the need to hike rates in the March meeting, though it is unclear how far the Federal Funds Rate needs to go and indicated that more than four rate hikes would be needed. Worth noting that analysts estimated the neutral rate to be somewhere around the 2.5% area.
XAG/USD Price Forecast: Technical outlook
The silver daily chart depicts neutral-upward bias after the broken ten-month-old downslope trendline, exposing the 200-DMA at $24.26. Nevertheless, a daily close over the abovementioned trendline would be required so that XAG bulls could use the $24.00-20 area as consolidation as they prepare to break the 200-DMA.
If the mentioned scenario plays out, XAG/USD’s first resistance would be January 20 daily high at $24.70. Breach of the latter would expose the $25.00 mark as the next support level. A decisive break would send XAG/USD rallying towards November’s 2021 highs at $25.40.