Silver (XAG/USD) rallied 2.26% on Friday, trading near $66.80 during the European session, driven by a correction in oil prices and US Treasury yields [1]. The WTI Oil price dropped to approximately $95.30 from a four-month high of $102.11, following Saudi Arabia's confirmation of considering new energy export strategies. This decline in oil prices has eased inflation fears, reducing expectations of further central bank interest rate hikes and thereby enhancing the appeal of non-yielding assets like silver [1].
US Treasury yields also retreated, with the 10-year yield trading close to the week's low at 4.94%, after reaching a 19-year high of 5.04% earlier in the week. TD Securities noted that the combination of hawkish Fed pricing, increased inflation-fighting credibility, and concerns about higher rates impacting growth should help keep 10-year yields contained [1].
Despite these supportive factors, a firm US Dollar—bolstered by hawkish Fed bets—could limit silver's upside. The US Dollar Index (DXY) remained flat but hovered near its six-week high of 100.37, making silver a less attractive risk-reward bet for investors at current levels [1].
Technically, XAG/USD holds a bullish near-term bias, trading above the 20-day Exponential Moving Average (EMA) at $65.15. The Relative Strength Index (RSI) at 54.97 indicates constructive bullish momentum without being overstretched. Immediate support is seen at the 20-day EMA, while a decisive break above the September 9 high of $68.33 could pave the way for a move toward the three-month high at $71.12 [1].
CONCLUSION
Silver's price has benefited from easing oil prices and lower US Treasury yields, but a strong US Dollar may cap further gains. Technical indicators suggest underlying demand remains robust, with key resistance levels in focus for potential further upside. Market participants are watching for a breakout above $68.33 to signal renewed bullish momentum.