FX.co ★ MMC | XAG/USD, SILVER

Silver (XAG/USD) is down 4.5% during the European session today, trading around $61.09. The white metal is plummeting as high US Treasury yields have made it less attractive. Currently, 10-year US Treasury Yields are near their 19-year high of 5.23% touched last Friday. Rising oil prices, driven by disruptions in the global oil supply from Middle Eastern conflicts, and growing expectations of more rate hikes by the Fed in the coming days have pushed US Treasury Yields Higher. According to analysts from Deutsche Bank, "another factor driving up bond yields yesterday was the resilience shown by the economic data." They refer specifically to US initial jobless claims, which stood at "only 197k for the week ended September 19 (versus an expectation of 200k)." They note that "this is one of the most timely indicators we receive regarding the health of the labour market, and this figure has driven down the 4-week moving average (a number cited by Fed Chair Warsh) to 202.25k." These factors, according to them, have "played into the storyline of a strong US economic performance, giving the Fed room to raise rates further." Currently, the CME FedWatch tool shows almost a 68% chance the Federal Reserve will raise rates again at its upcoming October meeting. The coming week will test hawkish Federal Reserve sentiment again, with payrolls (NFP) due on Friday. US NFP figures will likely show the creation of 100K new jobs, down from 162K in August. On the daily time frame, the XAG/USD pair is trading at $61.09, retaining a negative bias in the short-term horizon as it continues to trade below the 20-day exponential moving average (EMA) at $64.74. The pair has pulled back from the recent high but remains capped by the shorter-term trend line, as the RSI at 40.61 stays below the neutrality level of 50, suggesting bears currently hold the upper hand. Upside resistance includes $62.26 and the 20-day EMA at $64.74, with a daily close above this level needed to reverse the pair's negative sentiment. To the downside, the white metal may see further decline to $60.00.