XAG/USD hovers around $23.80 amid risky market sentiment
- Rising US Treasury bond yields are supporting the greenback and weighing on the precious metals complex.
- Ukrainian and Russian tensions are pushing markets to seek safe haven status for the USD.
- Technical Outlook XAG/USD: Bearish bias unless it breaks above the 200-DMA at $24.61.
Silver slips for the third consecutive trading session, trading at $23.81 in the New York session at the time of writing. Market sentiment has remained unchanged since the beginning of the week. Ukraine – The Russian conflict continues to dominate the headlines as market participants await the Federal Reserve’s monetary policy decision.
The white metal – a safe-haven precious metal like gold – failed to appreciate, despite geopolitical troubles partly attributed to US Treasury bond yields, recouping some of Monday’s losses, when it crossed the 1.70% threshold at press time at 1.747. %, supports the greenback. The US dollar index, an indicator of the value of the dollar against a basket of its rivals, advanced 0.28%, to 96.118 at 1419GMT.
Analysts at TD Securities said a hike in the funds rate at the March FOMC meeting had already been signaled by Fed policymakers, led by Jerome Powell. A take-off signal from the January meeting should come as no surprise. Nevertheless, the topic that worries investors is quantitative tightening (QT), or balance sheet reduction.
The US economic record included the Housing Price Index (HPI), which came in at 1.1%, in line with expectations. At 15:00 GMT, the Conference Board will release Consumer Confidence for December, expected at 111.4.
XAG/USD Price Prediction: Technical Outlook
On Tuesday, the white metal is trading towards the end of Monday, which was at $23.98. two cents of the $24.00 threshold. The price action for the past two days has approached the 78.6% Fibonacci retracement taken from the last pivot low at $22.81 to the high of the year at $24.70. However, the white metal is bearish unless XAG/USD breaks the 200-day moving average (DMA) at $24.61.
On the upside, the first resistance is the 38.2% Fibonacci retracement level at $23.98, unsuccessfully broken once. The next supply zone would be the January 24 daily high at $24.31, followed by the aforementioned 200-DMA at $24.61.