Silver prices (XAG/USD) are trading higher this Tuesday as the greenback takes a hit from profit-takers and sliding bond yields on the real long-term bonds.
On a day that has been relatively light on economic data, the yield on the 10-year US Treasury bond has eased 2.6%, creating bearish sentiment on the US Dollar and allowing prices of commodities to rise.
Spot silver (XAG/USD) is up nearly 1.6% as of the time of writing this Tuesday as a consequence, clearing the $25 mark with ease. This upside move also shows that the resolution of the bearish pennant on the daily chart appears complete.
The main headline for the day is the International Monetary Fund’s improved global economic outlook. The IMF has raised its global growth outlook for 2021 from 5.5% in January to 6.0%. The growth outlook for 2022 was also raised from 4.2% to 4.4%, sending the market into risk-on mode and further adding to the greenback’s tepid performance. Despite a word of caution on the growth projections being dependent on the handling of the coronavirus vaccine rollouts, traders bullish on silver prices appeared happy enough to book some gains from the situation.
Technical Levels to Watch for XAG/USD
Following the conclusion of the measured move from the breakdown of the bearish pennant on the daily chart, silver prices found support at a strong pivot zone, enabling the recovery seen on the day. Today’s 1.56% surge means that silver price is pushing towards the 25.386 resistance level. A break above that point opens the pathway towards 26.034, with 26.325 and 26.868 lining up as further targets to the north.
On the other hand, we could see a pullback towards 24.569 if bears repel the bullish onslaught on 25.386. Below this level, the support zone that lies between 23.966 (ceiling) and 23.617 (floor) forms a solid pivot zone for silver prices.
Silver Price (XAG/USD) Daily Chart