Silver Price Analysis: XAG/USD on front foot, eyeing resistance at $24.00 as geopolitical tensions bubble
17.02.2022, 15:46

Silver Price Analysis: XAG/USD on front foot, eyeing resistance at $24.00 as geopolitical tensions bubble

  • XAG/USD is trading on the front foot in the $23.70s as geopolitical tensions bubble and Russia/Ukraine war risk remains elevated.
  • Spot silver traders will be eyeing a test of resistance in the $24.00 area should the situation further escalate.

Spot silver (XAG/USD) prices have been trading on the front foot on Thursday and a challenge of earlier weekly highs at the $24.00 per troy ounce level seems likely if geopolitical tensions continue to rise. There has been limited fighting in Eastern Ukraine on Thursday between pro-Russia separatists and the Ukrainian forces and NATO/US officials continue to sound the alarm about the ongoing Russian troop build-up on Ukraine’s border and the possibility of an attack. Meanwhile, direct relations between NATO and Russia also continue to deteriorate, with Russia recently expelling the US Deputy Ambassador, eroding the seemingly now slim prospect of a diplomatic solution.

All of these fears have been weighing on risk assets (global equities are sharply lower) and boosting demand for safe-havens such as bonds and precious metals. The US 10-year bond yield was last down about 7.5bps on Thursday and back below 2.0% again, which itself helps spur demand for non-yielding assets like silver given the lower opportunity cost. XAG/USD currently trades in the $23.70s, up about 0.7% on the day, underperforming its gold counterpart for now, which for reference is about 1.4% higher on the day. If XAG/USD is able to get above resistance at $24.00, there is scope for some catch-up, as the door would be opened to a run towards the next resistance area around $24.50.

 

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