Silver Extends Recovery Above $67 as Yields Fall
Silver trades above $67.00 after a rebound from $62.00, supported by a drop in US Treasury yields despite a hawkish Fed decision.
Silver (XAG/USD) closed Friday above $67.00. This marks the second consecutive daily gain. The price rebounded from a low near $62.00 earlier in the week. The US 10-year Treasury yield fell below the 5% threshold. This decline in yields provided direct support to the metal. The Federal Reserve raised its benchmark rate by 25 basis points on Wednesday. The new rate band sits between 3.75% and 4.00%. Chair Kevin Warsh signaled further tightening to combat inflation. The dollar initially strengthened following the decision. Bond markets subsequently stabilized as confidence in central bank independence improved.
The retreat in long-term yields offset the negative impact of the hawkish rate hike. Silver is a yieldless asset that benefits from lower real interest rates. The dollar’s brief strength was outweighed by the bond market relief. This dynamic pushed XAG/USD higher for a second day in a row. The metal is now testing key resistance levels established in September.
Technical Resistance at Sixty Eight
Bulls face a critical test at $68.00. This level capped price rallies multiple times earlier in September. Momentum indicators show mixed signals. The 14-period Relative Strength Index hovers near 56. The MACD remains marginally below zero. These readings suggest limited follow-through for the current bullish move. Traders watch for a decisive break above $68.00 to confirm the trend.
Path Toward Seventy One
A breach of the $68.00 resistance clears the path to higher targets. The next significant levels are the mid-June and late-August highs above $71.00. Beyond that, the 200-day Simple Moving Average sits at $73.18. These levels represent major psychological and technical barriers. Sustained buying pressure is required to reach these zones. The current recovery depends on continued yield weakness or dollar softness.
Support Zones and Bearish Risks
Downside risk centers on session lows near $65.20. A drop below this level tests the key support zone between $62.20 and $63.05. This area forms the bottom of the last two months' trading range. It also marks the neckline of a bearish Head and Shoulders pattern. A break here would invalidate the recent recovery. According to GN auto markets/commodities: silver prices, the structure remains fragile. Indicators lack confirmation for a sustained breakout. Traders should monitor the $65.20 level for early warning signs of reversal.
