- Precious metals benefit from a risk-off market mood and lower US Treasury yields, silver and gold up 1.25% and 0.96%, each.
- Russia exerts pressure on selling gas to non-friendly countries, as Putin intends to use the Russian rouble as a payment method.
- XAG/USD Price Forecast: Golden-cross in the daily chart paves the way for further gains.
Late in the New York session, Silver (XAG/USD) recovered some of its bright, as XAG bulls stage a recovery and reclaim the $25.00 mark, amidst lower yields and risk-aversion in the financial markets. At the time of writing, XAG/USD is trading at $25.09.
Global equities overnight were upwards, though since the mid-European session and through the North American one, a dampened market mood, have them recording losses. Russia-Ukraine tussles keep grabbing headlines, though both parties’ stances remain put, so there has been no change. Linked to this, US President Joe Biden is traveling to the two-day reunion at NATO offices in Brussels. The US, UK, and EU keep imposing sanctions in Russia, whom of late in the day, retaliated as Russian President Putin said they intend to use Russian roubles when selling gas to non-friendly countries. Those remarks lifted oil prices as WTI’s reclaimed the $114.00 mark.
In consequence, precious metals are rising. Gold (XAU/USD) is also up in the day, close to 1%, at $1939.52 a troy ounce, while the sell-off in US Treasuries stalled, as the 10-year T-note yield eases from weekly highs, losing five basis points, down at 2.321%, a tailwind for XAG/USD.
Fed speakers take the forefront
Early in the New York session, Loretta Mester, Cleveland Fed President, crossed the wires. She said that the Fed would need to do some 50 bps moves this year while favoring frontloading rate hikes to better position themselves for how the US economy evolves in the second half of 2022. Mester added that “I have no concerns that rate increases are going to push the US economy into recession.”
Loretta Mester added her name to the list of Fed officials that have expressed the need for a 50 bps increase to the Federal Funds rates, led by Fed Chair Powell, James Bullard, Raphael Bostic, Chris Waller, and Mary Daly.
XAG/USD Price Forecast: Technical outlook
Silver (XAG/USD) bias is upwards, further confirmed by Monday’s trading session. On that day, the 50-day moving average (DMA) rollover the 200-DMA, forming a golden-cross, a bullish signal that, although is lagging, could open the door for further gains on XAG/USD.
With that said, XAG/USD’s first resistance would be November 16, 2021, daily high at $25.40. Breach of the latter would expose August 4, 2021, daily high at $26.00, followed by July 16, 2021, at $26.45.