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- The price of silver slipped more than 5% over the week, weighed down by strong US Treasury yields.
- Warmongering rhetoric from Fed policymakers is keeping the precious metals segment heavy.
- XAG/USD Price Prediction: Breaking below $17.00 to push silver price below $16.00.
The price of silver has fallen sharply for four consecutive days, hitting a new year-to-date (YTD) low below the $18.00 figure, levels not seen since July 2020. XAG/USD traded at $17.96 at the start of the Asia-Pacific session, almost flat after falling 2.33%, hitting a two-year low at $17.91 on Wednesday.
US equities ended with losses as month-end flows and risk aversion dominated on the last trading day of August. During the day, Cleveland Fed President Loretta Mester said rates “need to be around 4% and stay there” on Wednesday. Mester added that she “doesn’t expect the Fed to lower the fed funds rate target next year.”
In the meantime, inflation in the euro zone, above the 9% threshold, is putting additional pressure on the ECB. Money market futures predict a rate hike of at least 50 basis points on September 8.
From a data perspective, the US economic calendar was light, although it featured August’s first ADP job change after a pause due to some survey changes. Private hires rose 132K less than July’s 270K. Later, the Chicago PMI for August rose more than expected, topping 52.2 vs. 52 expected by analysts.
What to watch
The US economy record will include the S&P global manufacturing PMI alongside initial jobless claims for the week ending August 26 and the ISM manufacturing PMI.
XAG/USD Price Prediction: Technical Outlook
From a technical perspective, XAG/USD is biased lower. On Wednesday, the 20-day EMA broke below the 50-day EMA, illustrating that the sellers are gaining momentum. It should be noted that the Relative Strength Index (RSI) has some margin before entering oversold conditions. It should be noted that the RSI hit a low of 21.29 when the white metal fell from $26.20 in April 2022 to $20.46.
Therefore, the first XAG/USD support would be June 15, 2020 daily low of $16.95, followed by April 14, 2020 highest support at $15.84.
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