Silver Price Forecast: XAG/USD slides below $24.00 to snap two-day uptrend as US Dollar rebounds
NEW YORK (Dec 28) Silver price (XAG/USD) renews its intraday low near $23.95 as bears return to the table early Wednesday after a two-day absence. The bright metal’s latest weakness could be linked to the US Dollar’s mildly positive performance and doubts over China’s Covid-linked optimism.
US Dollar Index (DXY) prints mild gains around 104.25 by the press time as it defends the previous day’s recovery during the sluggish session. In doing so, the greenback’s gauge versus the six major currencies also justifies the recently mixed US data and concerns surrounding the Fed’s next moves.
US Good Trade Balance for November improved to $-83.3B versus $98.8B prior, but the US S&P/Case-Shiller Home Price Indices for October dropped to 8.6% YoY versus 9.7% expected and 10.4% previous readings. It’s worth noting that the previously mixed readings of the US inflation and growth figures raised doubts about the Federal Reserve’s (Fed) hawkish move, especially after the US central bank appeared cautiously optimistic over the rate hikes in its latest monetary policy meeting.
Elsewhere, China announced multiple measures to open national and international boundaries in a rush to convey the easing of COVID-19 fears. In doing so, the dragon nation initially ruled out the quarantine requirement for inbound travelers before stating that the nation will resume citizens' applications for ordinary tourist passports and visits abroad from January 8, 2023. Even so, a US Official mentioned, per Reuters, that the US government may impose new COVID-19 measures on travelers to the United States from China over concerns about the "lack of transparent data" coming from Beijing.
Against this backdrop, the 10-year Treasury bond yields remain sidelined near 3.85% after refreshing the six-week high the previous day. In contrast, the S&P 500 Futures remain indecisive while tracking the mixed closing of the Wall Street benchmarks.
Given the sluggish session and a light calendar, except for the US Pending Home Sales for November, which holds the market consensus of 0.6% versus -4.6% previous readings, the Silver price is likely to extend the latest weakness amid firmer US Treasury bond yields.
FXStreet
