- Silver gains as US Treasury yields ease, but upside remains capped by a stronger US Dollar.
- Markets reassess Fed outlook, shifting from rate cuts to a prolonged hold through 2026.
- XAG/USD technical bias stays weak below the 100-day SMA.
Silver (XAG/USD) trades on the front foot on Monday, supported by a pullback in US Treasury yields as traders reassess the Federal Reserve’s (Fed) monetary policy path. At the time of writing, XAG/USD is trading around $70.50, up nearly 1% on the day. However, a broadly stronger US Dollar (USD) is limiting follow-through buying.
US Treasury yields are pulling back after a recent surge to multi-month highs, with the benchmark 10-year yield down more than 6 basis points (bps) to around 4.35% on Monday. Earlier, markets had priced in at least two rate cuts before the US-Iran war, but rising Oil prices briefly lifted expectations of rate hikes toward year-end
Those bets are now being scaled back, with traders increasingly expecting the Fed to hold rates steady through 2026, according to the CME FedWatch Tool.
This shift reflects growing concerns that higher interest rates, combined with elevated energy prices, could weigh on economic growth, reducing the need for tightening.
That said, despite the recent stabilization, Silver is likely to remain volatile as shifting rate expectations and ongoing Middle East tensions continue to drive market sentiment.
From a technical perspective, the near-term outlook for XAG/USD is neutral to bearish, as prices remain capped below the 100-day Simple Moving Average (SMA) at $74.96 after slipping below it earlier this month.
The Relative Strength Index (RSI) hovers near 40, indicating weak momentum and keeping downside pressure intact without signaling oversold conditions. The Moving Average Convergence Divergence (MACD) indicator remains below zero, though the line edges higher toward the signal line, which hints at fading bearish momentum rather than a confirmed shift higher.
Immediate resistance emerges at the 61.8% Fibonacci retracement at $74.43, measured from the $61.01 low to the $96.15 high, with the 50% retracement at $78.58 as the next hurdle if a bounce extends.
On the downside, initial support is seen near the recent lows around $68, which converges with the 78.6% retracement at $68.53, forming a key defensive area for buyers.
A decisive break below this zone would expose the psychological $65 handle and bring the 200-day SMA near $58 into focus, while recovery above $74.43 would ease immediate bearish pressure and open the way toward $78.58.
