Silver (XAG/USD) traded higher on Monday, supported by a pullback in US Treasury yields as traders reassessed the Federal Reserve’s monetary policy outlook. At the time of writing, XAG/USD was trading around $70.50, up nearly 1.0% on the day, although a broadly stronger US Dollar limited further gains [1]. The benchmark 10-year US Treasury yield declined by more than 6 basis points to approximately 4.35%, reversing a recent surge to multi-month highs [1]. Previously, markets had anticipated at least two rate cuts before the US-Iran war, but rising oil prices temporarily shifted expectations toward potential rate hikes later in the year. These expectations are now being scaled back, with traders increasingly forecasting that the Fed will hold rates steady through 2026, according to the CME FedWatch Tool [1]. This reflects concerns that higher interest rates and elevated energy prices could weigh on economic growth, reducing the need for further tightening [1].
Despite the recent stabilization, silver is expected to remain volatile as shifting rate expectations and ongoing Middle East tensions continue to influence market sentiment [1]. 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 [1]. The Relative Strength Index (RSI) is near 40, indicating weak momentum and maintaining downside pressure without signaling oversold conditions [1]. The Moving Average Convergence Divergence (MACD) indicator remains below zero, though it is edging higher toward the signal line, suggesting fading bearish momentum rather than a confirmed shift higher [1].
Immediate resistance is identified at the 61.8% Fibonacci retracement level 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 [1]. On the downside, initial support is seen near recent lows around $68, which converges with the 78.6% retracement at $68.53, forming a key defensive area for buyers [1]. A decisive break below this zone would expose the psychological $65 level 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 [1].
CONCLUSION
Silver prices have risen modestly amid a pullback in US Treasury yields, but remain capped below key technical resistance levels. The market outlook is neutral to bearish, with volatility expected due to shifting rate expectations and geopolitical tensions. Traders are closely watching support and resistance zones for signs of further movement.