Silver prices (XAG/USD) rose by 2% to near $60.40 during the European trading session on Friday, reversing all of Thursday’s losses. This rebound is attributed to a pullback in US Treasury yields, which had previously reached a two-decade high of 5.36% before correcting sharply. At press time, 10-year US bond yields were up 0.17% to near 2.44% [1]. The decline in yields has also weighed on the US Dollar, with the Dollar Index (DXY) trading 0.1% lower at around 102.00 in early European trade. A weaker US Dollar typically improves the risk-reward conditions for silver prices [1].
Despite the recent gains, strategists at ING caution that it may be premature to call a pause in the US Dollar and Treasury yields, citing ongoing geopolitical tensions between the US and Iran. They note that while the Dollar lost some ground as Treasuries took a breather, there are no signs of a broader USD correction. The oil market continues to price in a geopolitical premium, keeping prices above $100 per barrel despite improved Gulf supply, as the conflict persists [1].
From a technical perspective, XAG/USD remains below the 20-day Exponential Moving Average (EMA) at $62.14, maintaining a bearish near-term bias. The Relative Strength Index (RSI) at 41.86 indicates persistent, though not extreme, selling pressure. Key resistance is at the 20-day EMA ($62.14), while the two-month low at $58.50 serves as a critical support level [1].
Looking ahead, the major trigger for silver prices will be the release of the US Consumer Price Index (CPI) data for September, scheduled for Wednesday. Market participants are expected to closely monitor this data for further direction [1].
CONCLUSION
Silver has rebounded on the back of a pullback in US Treasury yields and a softer US Dollar, but the overall trend remains bearish below key technical levels. Geopolitical tensions and upcoming US CPI data are likely to influence the next major move in silver prices. Market sentiment is cautiously optimistic, with medium-term uncertainty prevailing.