Silver (XAG/USD) recovered from early losses to trade near $64.00 during the early European session on Wednesday, following pressure from surging US Treasury yields and expectations of further Federal Reserve tightening [1]. The 10-year US Treasury yield reached a record high of 4.81%, the highest since November 2023, as market participants increased bets on a Fed rate hike, with the CME FedWatch tool indicating a 67% probability of a hike at this month's policy meeting [1].
Hawkish sentiment was reinforced after Fed Chair Kevin Warsh warned of upside inflation risks at the Jackson Hole Symposium, emphasizing that the Fed still has 'work to do' if inflation does not decline at a sufficient pace [1]. Analysts at MUFG noted that Warsh's tone remained tough on inflation, consistent with his previous remarks [1]. Additionally, Fed Governor Michael Barr stated that interest rates may need to rise if price pressures do not moderate soon, warning that 'inflation remains too high' [1].
Investors are now awaiting the US ADP Employment Change data for August, scheduled for release at 12:15 GMT. Estimates suggest the US private sector added 48,000 jobs, slightly above July's 44,000 [1].
From a technical perspective, XAG/USD trades at $64.05, remaining below the 20-day Exponential Moving Average (EMA) at $65.33, which keeps the near-term outlook mildly bearish. The Relative Strength Index (RSI) stands at 47.72, indicating waning bullish momentum. Immediate resistance is at the 20-day EMA, and a daily close above this level could open the way toward the August high at $71.12 [1].
CONCLUSION
Silver's rebound to near $64 comes amid heightened expectations of further Fed tightening and record-high US Treasury yields, which continue to pressure non-yielding assets. Market sentiment remains cautious, with technical indicators suggesting a mildly bearish outlook unless XAG/USD can close above key resistance levels.