Silver Price Forecast: XAG/USD remains firm at around $22.20s, ahead of US CPI

• Silver is recording gains of 1.43% in the week.
• The sentiment is mixed as the Asian session begins, US Treasury yields, and the greenback fall.
• US Treasury Secretary Yellen blames inflation on Russia’s invasion of Ukraine, though she recognized that inflation was not “transitory.”
• Silver Price Forecast (XAG/USD): Break above $22.50 to open the door towards $23.20s.

Silver (XAG/USD) records decent gains of 0.08%, as the Asian session begins, after Tuesday’s trading session when the white metal recorded gains of 0.70%. The XAG/USD is trading at $22.23 at the time of writing.

Asian equity futures are mixed ahead of Wednesday’s trading day. Wall Street finished with decent gains in choppy trading conditions, boosted by falling US Treasury yields and a softer US Dollar. The US 10-year benchmark note rate finished at 2.979%, below the 3% threshold, and the US Dollar Index, a gauge of the buck’s value, edges down 0.08%, sitting at 102.331.

In the commodities complex, XAG/USD benefitted from a soft greenback. It’s worth noting that precious metals rose in tandem, propelled by the factors above-mentioned.

Investors’ focus begins to shift towards Friday’s release of US inflation figures. Last week’s May Nonfarm Payrolls report showed that the US economy is far from slowing, despite the Q1 GDP contraction. Also, ISM PMIs, even though they slowed a tone, remain in expansionary territory.

Meanwhile, US Treasury Secretary Janet Yellen said that inflation is likely to stay high on Tuesday in an appearance with lawmakers. While Republicans blamed the US President Biden’s American Rescue Plan (ARP), Yellen said that “we’re seeing high inflation in almost all developed countries worldwide, and they have very different fiscal policies.” She added that Russia’s invasion of Ukraine is having an impact on energy and food prices globally.

Elsewhere the World Bank cut the 2022 global growth forecast to 2.9% from 4.1% in January and reported that growth in developed countries might slow down to 2.6%.

Silver Price Forecast (XAG/USD): Technical outlook

XAG/USD remains downward biased, as shown by the daily moving averages (DMAs). But, the correction from year-to-date lows near $20.40s to $22.50s might open the door for further gains, targeting the confluence of the 50-day moving average (DMA) and the February 11 daily low-turned-resistance at $23.08.

Therefore, the XAG/USD’s first resistance would be the June 6 daily high at $22.51. Breach of the latter would expose the confluence mentioned above at around $23.08. Once cleared, XAG/USD’s next supply zone would be the May 5 daily high at $23.28.

Key Technical Levels