- Silver breaks through $26.00 but fails to break above the all-time high of $26.08.
- Dovish sentiment from the Federal Reserve underpinned the white metal.
- The XAG/USD pair remains in a solid uptrend despite the overbought readings on the RSI; kickback is possible.
The price of silver rallied but fell short of a year-to-date high of $26.08, with the XAG supported by buyers keeping the white metal trading near $26.00. US data showed that the labor market is easing amid the ongoing US banking turmoil, weighing on market sentiment. He XAG/USD It is trading at $25.96 a troy ounce, up 1.40%.
Silver Nears Yearly Highs as Fed Policy Drives Uptrend, but Overbought RSI Signals Possible Reversal
The rise in the precious metals segment was due to investors’ search for safety, against a backdrop of continued deterioration in the US economy, coupled with falling Treasury yields. A reflection of the latter is that investors seemed to be taking into account the Federal Reserve’s rate cut in 2023.
On Wednesday, the Fed raised rates to the 5.00% – 5.25% zone, 25 basis points higher than its March meeting level. It signaled that it would depend on the data, while removing “hawkish line” language from its monetary policy statement.
Although the Fed’s decision was perceived as dovish, when Fed Chairman Jerome Powell was asked about the rate cuts, he said: “It would not be appropriate to cut rates, given our view that inflation will take some time.” in going down.”
Meanwhile, the job market continued to ease, as shown by Initial Jobless Claims for the week ending April 29, which topped the estimate of 240,000 and stood at 242,000. Continuation Requests were down 38,000, to 1.81 million, in the week ending April 22.
In other data, the US Trade Balance deficit narrowed in March and exports increased, the Commerce Department reported.
The US economic calendar will include Non-Farm Payrolls for April, which is expected to show 180,000 jobs added to the economy, down from 236,000 the previous month. We will also report the Average Earnings per Hour, which will remain at 0.3% month-on-month, and the Unemployment Rate, which will stand at 3.6%.
XAG/USD Technical Analysis
The XAG/USD pair remains in a solid uptrend, despite falling as low as $26.08, the highest level so far this year. However, elevated RSI readings in overbought territory could refrain Silver traders from opening new positions as price action looks overextended. That could pave the way for a mean reversion towards the 20-day EMA, which intersects at $25.00, as buyers take a breather to lift XAG/USD higher.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
