Silver Price Analysis: XAG/USD rallies to session highs in $21.60s post-weak US Retail Sales data
15.06.2022, 12:51

Silver Price Analysis: XAG/USD rallies to session highs in $21.60s post-weak US Retail Sales data

 

  • Silver just hit session highs in the $21.60s post-weak US Retail Sales data ahead of Wednesday’s Fed announcement.
  • XAG/USD remains at risk of reversing the day’s gains if the Fed delivers a hawkish surprise. 

Spot silver (XAG/USD) prices rallied to fresh session highs in the $21.60s per troy ounce in wake of the latest US Retail Sales report that showed, when adjusted for inflation, headline sales were down 1.3% in May. The latest US data will undoubtedly result in fresh negative revisions to Q2 GDP growth expectations, which ought to spur fresh US recession calls from analysts. 

XAG/USD is now trading nearly 3.0% higher on the day, having bounced from around $21.00, with recession fears seemingly offering support to safe-haven precious metals for now. But whether this upside can last through the upcoming Fed meeting remains to be seen. The US central bank is expected to lift interest rates by 75 bps and sound much, much more hawkish on the inflation outlook, as well as on the outlook for the so-called terminal interest rate. 

Though this hawkishness is arguably already priced in to a large degree, precious metals like silver remain at risk of suffering losses. Fed hawkishness is typically seen as a negative for precious metals given it is associated with a stronger US dollar and higher US yields, both of which tend to weigh on the likes of silver. XAG/USD may struggle to get above its 21-Day Moving Average in the hours ahead and bears will be eyeing a return to $21.00 on a hawkish Fed surprise. 

 

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