The XAG/USD jumped above $22.70, seeing more than 0.80% gains and is set to close a winning week.
Core PCE declined to 4.6% YoY in May, lower than expectations.
Following the data the USD and US bond yields retreated.
The XAG/USD surpassed the $22.70 mark on Friday and registered an increase of over 0.80%. This positive momentum positions it for a week of gains after two weeks of losses. The boost in Silver prices can be explained by the release of soft Core Personal Consumption Expenditures (PCE) data from the US from May, which revealed a decline to 4.6% year-on-year in May, falling short of expectations. As a result, the US dollar and US bond yields retreated in response to the data favoring the precious metal.
USD weakened after soft Core PCE figures
The US’s Core Personal Consumption Expenditures (PCE), which measures the amount of money consumers spend in a month excluding seasonally volatile products such as food and energy, witnessed a decline in May. The figure decelerated from 4.7% to 4.6% YoY in May, while the headline dropped from 4.6% to 3.8%.
As a reaction, the DXY Index dropped from 103.55 to 102.90 while US bond yields which could be considered the opportunity cost of holding non-yielding precious metals retreated from daily highs. In that sense, the yield on the 2-year Treasury Bond reached a peak of 4.93%, marking its highest level since March 9 and subsequently pulled back to 4.85%. In addition, the 5-year and 10-year rates experienced declines, with the former falling to 4.13% and the latter dropping to 3.83%.
Focus now shifts to next week’s labor market data from the US, including ADP, Jobless Claims on Thursday, and the Nonfarm Payrolls report on Friday.
XAG/USD Levels to watch
According to the daily chart, the XAG/USD appears bearish in the short term. The Relative Strength (RSI) and Moving Average Convergence Divergence (MACD) both remain in negative territory, suggesting that the sellers have the upperhand. In addition, traders should eye a bearish cross performed by the 20 and 100-day Simple Moving Average (SMA) of $23.35, which could fuel further downside.
On the downside, support levels to watch stand up at the 200-day SMA at $22.53, followed by $22.30 and June lows at $22.15. On the flipside, resistances are seen at $23.00 followed by $23.10 and the mentioned convergence of SMA’s at $23.35.
XAG/USD Daily chart
-638237414349722126.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : FXStreet – https://www.fxstreet.com/news/silver-price-forecast-xag-usd-gains-ground-following-soft-pce-data-202306301705
