- Silver price grinds higher after three-day winning streak.
- Upbeat US data, yields underpin US Dollar rebound and probe XAG/USD bulls.
- A mentioning of Fed policymakers’ discussion on pivot could propel Silver price.
Silver price (XAG/USD) seesaws around $21.85 as bulls take a breather during early Wednesday, after three-day uptrend. In doing so, the bright metal fails to respect the US Dollar’s latest rebound but shows traders’ anxiety ahead of the week’s key event.
That said, the XAG/USD bulls could have traced the hopes of more industrial demand amid a recent jump in the manufacturing activity data from major economies, including the UK, the US, Germany and Europe.
On the other hand, the US Dollar Index (DXY) snapped a two-day downtrend to regain 104.00 on Tuesday, grinding higher around 104.20 by the press time, as the US PMIs for February propelled hawkish Fed bets.
It should be noted that the preliminary readings of the US S&P Global Manufacturing PMI rose to 47.8 from 46.9 prior and versus 47.3 market forecasts while the Services PMI jumped to the eight-month high to 50.5 compared to 47.2 expected and 46.8 previous readings. As a result, the S&P Global Composite PMI surpassed 47.5 analysts’ consensus and 46.8 previous reading to mark 50.2 figure.
Following the data, the FEDWATCH tool signals that the money market participants see the benchmark level peaking at 5.3% in July, and staying near those levels throughout the year, versus 5.10% expected by the US Federal Reserve (Fed).
Other than the Fed bets, the upbeat US data also propelled the US Treasury bond yields as the benchmark 10-year bond coupon refreshed a three-month high near 3.95%. Further, the two-year counterpart also jumped to the highest levels since early November 2022, to 4.73% at latest, which in turn propelled the US Dollar and should have capped the XAG/USD upside.
Elsewhere, Wall Street closed in the red as geopolitical fears emanating from Russia and China joined the aforementioned hawkish Fed bets, as well as downbeat earnings forecasts from the tops US retailers including Home Depot and Wall Mart.
Moving on, Fed Minutes should be eyed for policy pivot talks considering the latest cautiously optimistic tone of the policymakers. That said, XAG/USD may rally in case of a policymarkers’ discussion on pausing the rate hikes trajectory.
Technical analysis
Despite the latest rebound, Silver price needs to provide a daily closing beyond the 100-DMA, around $22.00 by the press time.
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.
Read More
Bong Mischke