Key Drivers Behind the Bearish Sentiment on Silver (XAGUSD)
Silver (XAGUSD) is showing a slight bearish bias on October 18, 2024, influenced by a combination of fundamental factors and current market conditions. As traders and investors monitor the fluctuating economic landscape, several key drivers are contributing to the downside momentum in XAGUSD today. Let’s explore the factors pushing silver prices lower and what to watch in the coming sessions.
1. Stronger US Dollar (USD)
A stronger US Dollar is one of the most significant headwinds for silver prices today. The USD index (DXY) continues to gain strength, primarily due to hawkish signals from the Federal Reserve. With inflationary pressures still present and the Fed remaining committed to tightening monetary policy, the dollar is seeing consistent demand. As silver is priced in USD, a stronger greenback increases the cost for buyers in other currencies, pushing XAGUSD lower.
2. Rising US Treasury Yields
US Treasury yields have been climbing as the bond market adjusts to expectations of continued Fed rate hikes or at least a longer period of elevated rates. The 10-year Treasury yield has been edging higher, which typically signals reduced appeal for non-yielding assets like silver. Investors tend to move towards assets that offer returns, making precious metals less attractive during periods of rising yields.
3. Lack of Safe-Haven Demand
Another key driver impacting XAGUSD is the reduced demand for safe-haven assets. In times of geopolitical tension or economic uncertainty, investors often flock to silver and gold as protection against market volatility. However, as global equity markets show relative stability and no significant macroeconomic shocks loom on the horizon, the demand for silver as a safe-haven is lower today. This lack of buying pressure contributes to the slight bearish bias in XAGUSD.
4. Weaker Industrial Demand for Silver
Silver is not only a precious metal but also an industrial metal. The recent decline in industrial output data from key economies, especially China, has weighed on the industrial demand for silver. China, being one of the largest consumers of silver for its manufacturing sector, has posted weaker-than-expected economic growth. This slowdown in manufacturing activity limits demand for silver, further pressuring prices lower.
5. Technical Analysis: Silver Below Key Resistance Levels
From a technical perspective, XAGUSD is trading below critical resistance levels around $22.00. The failure to break above this resistance has triggered selling pressure, and traders are now eyeing support near $21.50. The RSI (Relative Strength Index) shows a neutral to bearish sentiment, further confirming the slight downward momentum for silver today.
Conclusion: XAGUSD Faces Bearish Bias Today
With a stronger USD, rising Treasury yields, and weaker industrial demand from major economies like China, silver prices are expected to remain under pressure. While a sharp downturn in XAGUSD is not expected, the overall bias for today points towards a slightly bearish outlook. Traders should watch key support levels closely and monitor any changes in macroeconomic data or Federal Reserve commentary that could shift the dynamics for silver.
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Silver (XAGUSD) is showing a slight bearish bias on October 18, 2024, influenced by a combination of fundamental factors and current market conditions. As traders and investors monitor the fluctuating economic landscape, several key drivers are contributing to the downside momentum in XAGUSD today. Let’s explore the factors pushing silver prices lower and what to watch in the coming sessions.
1. Stronger US Dollar (USD)
A stronger US Dollar is one of the most significant headwinds for silver prices today. The USD index (DXY) continues to gain strength, primarily due to hawkish signals from the Federal Reserve. With inflationary pressures still present and the Fed remaining committed to tightening monetary policy, the dollar is seeing consistent demand. As silver is priced in USD, a stronger greenback increases the cost for buyers in other currencies, pushing XAGUSD lower.
2. Rising US Treasury Yields
US Treasury yields have been climbing as the bond market adjusts to expectations of continued Fed rate hikes or at least a longer period of elevated rates. The 10-year Treasury yield has been edging higher, which typically signals reduced appeal for non-yielding assets like silver. Investors tend to move towards assets that offer returns, making precious metals less attractive during periods of rising yields.
3. Lack of Safe-Haven Demand
Another key driver impacting XAGUSD is the reduced demand for safe-haven assets. In times of geopolitical tension or economic uncertainty, investors often flock to silver and gold as protection against market volatility. However, as global equity markets show relative stability and no significant macroeconomic shocks loom on the horizon, the demand for silver as a safe-haven is lower today. This lack of buying pressure contributes to the slight bearish bias in XAGUSD.
4. Weaker Industrial Demand for Silver
Silver is not only a precious metal but also an industrial metal. The recent decline in industrial output data from key economies, especially China, has weighed on the industrial demand for silver. China, being one of the largest consumers of silver for its manufacturing sector, has posted weaker-than-expected economic growth. This slowdown in manufacturing activity limits demand for silver, further pressuring prices lower.
5. Technical Analysis: Silver Below Key Resistance Levels
From a technical perspective, XAGUSD is trading below critical resistance levels around $22.00. The failure to break above this resistance has triggered selling pressure, and traders are now eyeing support near $21.50. The RSI (Relative Strength Index) shows a neutral to bearish sentiment, further confirming the slight downward momentum for silver today.
Conclusion: XAGUSD Faces Bearish Bias Today
With a stronger USD, rising Treasury yields, and weaker industrial demand from major economies like China, silver prices are expected to remain under pressure. While a sharp downturn in XAGUSD is not expected, the overall bias for today points towards a slightly bearish outlook. Traders should watch key support levels closely and monitor any changes in macroeconomic data or Federal Reserve commentary that could shift the dynamics for silver.
SEO Keywords:
XAGUSD, silver price analysis, silver market outlook, XAGUSD forecast, silver trading strategy, October 18 2024 XAGUSD, precious metals trading, bearish silver outlook, USD impact on silver, silver and US Treasury yields, XAGUSD technical analysis, silver industrial demand, silver price forecast.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.