[ad_1]
- The price of silver extends its weekly rally after hitting lows around $18.00.
- XAGUSD surges as falling US Treasury yields undermine the greenback.
- The US economy is entering recession territory as GDP fell by 0.9%.
Silver prices have rallied for three straight days, gaining nearly 9% over the week on bullish sentiment among traders, the perception of a “dovish” bias in the Fed, leading to a falling US Treasury yields and a weakening US dollar. Along with what was previously mentioned, a dismal US GDP reading for the second quarter reduced bets that the US Federal Reserve would continue to tighten at its current pace as the stagflationary scenario worsens. At the time of writing, XAGUSD is trading at $19.91.
XAGUSD surges as falling US Treasury yields undermine greenback
US stock futures rise on positive US corporate earnings. In the meantime, falling US Treasury yields, led by the 10-year bond rate which fell 12 basis points, yielding just 2.671%, boosted appetite for the white metal.
On Thursday, the US Commerce Department revealed that US GDP for the second quarter fell 0.9% year-on-year after falling 1.6% in the first quarter, meaning the US is in a recession. technical. Meanwhile, the US Department of Labor reported that initial jobless claims for the week ending July 23 rose by 256,000, which is higher than expected but lower than the previous week’s 261,000. .
During the day, the greenback weakened, undermined by falling US bond rates. The US Dollar Index is down 0.24% and stands at 106.206 after hitting a daily high at 106.975.
On Wednesday, the Federal Reserve raised the federal funds rate (FFR) by 75 basis points. In the monetary policy statement, the Fed acknowledged that the economy is slowing, but it also underlined its commitment to bringing inflation back to its 2% target. Nonetheless, money market futures have discounted further rate hikes by the Fed as they anticipate less than 100 basis points of tightening, forecasting the FFR to end around 3.25%.
Read also : Gold Price Forecast: XAUUSD Conquers $1,750 as Q2 US GDP Shrinks, Triggering Recession
What to watch
The US Economic Record will feature Personal Consumption Expenditure (PCE) in its top reads. Later, the University of Michigan (UoM) consumer sentiment for July’s final reading will be revealed.
Silver (XAGUSD) Major Technical Levels
[ad_2]
Source link
