silver price

Rising US Bond Yields Squeezing Silver Prices At $28

Spot silver prices (XAG/USD) are trading lower as a result of a renewed surge in US bond yields. The pickup in activity in the US government bond market, where the US-10 year and the 30-year yields have cleared 1.40% and 2.20% respectively, has forced capital out of the non-yielding metals and into the bond market. 

The latest driver of the US bond yields is the latest FDA report, which has given a pass mark to Johnson& Johnson’s single-shot Covid-19 vaccine candidate in terms of safety profile and efficacy. This news further heightens optimism about a faster-than-expected global economic recovery. 

It must also be noted that Fed Chair Jerome Powell has not mentioned any concerns to growing yields, and no reference to a potential purchase of long-term bonds to curtail the growing yield curve was made. This is also interpreted as a positive for bond yields, hence the upsurge on Wednesday. 

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The downside in silver prices appears capped, as expectations for faster global growth also mean increased demand for silver, which is an industrial metal.

Technical Levels to Watch

The active silver price candle currently sits on the support at 27.502. A breakdown of this support, as well as the ascending support trendline, targets 26.868 initially. A further decline brings 26.325 into focus, with 26.034 and 25.386 serving as additional downside targets.

On the other hand, a bounce from the current support pushes silver price for a retest of the 28.073 price resistance, beyond which 28.921 and 29.873 make themselves available as potential upside targets. 

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Silver Price (XAG/USD) Daily Chart

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