Support is being approached as losses continue in the XAG/USD price analysis
Silver Prices Drop as US Treasury Yields Rise
Silver prices are continuing to go down and are currently trading at around $21.80. This is because of the strong US Treasury Yields, which are making non-yielding assets like silver less attractive. The yield on the 10-year US Treasury bond is currently at 4.61%, which is higher than before.
China recently released its Manufacturing PMI data, which showed improvement and entered positive territory. However, this positive news did not have a good effect on silver prices.
The Chinese NBS Manufacturing PMI for August increased to 50.2, surpassing the expected 50.0. The Non-Manufacturing PMI also climbed to 51.7, exceeding the market consensus of 51.5.
What to Expect
The current trend for silver prices is going down, and it seems to be leaning towards a bearish bias. The 14-day Relative Strength Index (RSI) is still below the 50 level, which indicates a bearish momentum. If the downward trend continues, the XAG/USD pair could find support at the $21.50 level, and then at the $21.00 level.
On the other hand, if there is a strong upward movement, the XAG/USD pair could reach the 23.6% Fibonacci retracement at $22.46, which is in line with the seven-day Exponential Moving Average (EMA) at $22.49. Breaking above this level could lead to further exploration of the 14-day EMA at $22.79, and then the $23.00 level.
The Moving Average Convergence Divergence (MACD) indicator is giving a weak signal for silver bulls. The MACD line is below the centerline and the signal line, which suggests that there is potentially weak momentum in the XAG/USD’s price movement.