Silver (XAG/USD) traded lower on Friday, declining by 2% to approximately $57.50 as of the time of writing, and is set to close July in negative territory [1]. The downward pressure on silver prices was primarily attributed to rising US Treasury yields, which outweighed the support from a weaker US Dollar. The US Dollar Index (DXY) hovered near 100, close to six-week lows, following suspected intervention by Japanese authorities to support the Japanese Yen [1].
Elevated energy prices have kept inflation risks tilted to the upside, reinforcing expectations that the Federal Reserve may maintain a tighter monetary policy or potentially raise interest rates later in the year. These hawkish Fed expectations have weighed on non-yielding metals such as silver, as higher borrowing costs increase the appeal of interest-bearing assets over precious metals [1].
From a technical perspective, silver is consolidating above the $55 support area, but the broader trend remains bearish as XAG/USD trades below its 21-day, 50-day, and 100-day Simple Moving Averages (SMAs). The Relative Strength Index (RSI) is near 44, below the neutral 50 level, indicating subdued buying pressure. However, the positive Moving Average Convergence Divergence (MACD) reading suggests that downside momentum is easing [1].
Immediate resistance is identified at the 21-day SMA near $58.50, with further potential recovery targets at the 50-day SMA ($63) and the 100-day SMA ($70) if the price closes above these levels. On the downside, support is seen at $55, with a deeper floor near $45 if selling resumes, keeping silver vulnerable while it remains below key moving averages [1].
CONCLUSION
Silver faces ongoing pressure from rising US Treasury yields and hawkish Fed expectations, resulting in a 2% decline to $57.50 and a bearish technical outlook. While downside momentum appears to be easing, the metal remains vulnerable below key moving averages, with critical support at $55 and resistance at $58.50. Market participants are likely to remain cautious until a clear reversal or stabilization above resistance levels occurs.