Silver Price Forecast: XAG/USD reclaims the $19.00 mark, gaining 3.86% in the week

• Silver price is erasing Thursday’s losses up by almost 2% on Friday.
• September’s US economic data justifies the Fed’s 75 bps rate hike.
• The US Consumer Sentiment improved, showing US citizens resilience despite a worsening economic outlook.

The silver price climbed as the Wall Street close looms, gaining 1.85% during the day, caused by a soft US dollar, while US Treasury yields stalled. Positive US economic data relieve investors’ worries about the Federal Reserve hiking 100 bps instead of 75 in the next week’s meeting, while a risk-off impulse keeps global equities in the red. At the time of writing, the XAG/USD is trading at $19.54, back above the $19.00 mark.

XAG/USD climbs due to US T-bond yields unchanged, and a soft US dollar

Earlier, US economic data revealed that US Consumer Sentiment continued improving, despite increasing fears that the US central bank tightening would spark a US recession. The reading ticked to 59.5, lower than estimates but above the prior month’s reading of 58.6.  

“After the marked improvement in sentiment in August, consumers showed signs of uncertainty over the trajectory of the economy.” Inflation expectations in the same report for 1-year dropped to 4.6% vs. 4,8% in August,” Joanne Hsu, director of the UoM Survey, said.

Meanwhile, the greenback is fluctuating during the session, about to finish unchanged. The US Dollar Index is down 0.02%, at 109.718, while the US 10-year benchmark note rate is at 3.449%, almost flat.

These previously mentioned factors bolstered appetite for the non-yielding metal, gaining traction, and extending its weekly gains to 3.86%.

Aside from this, US data reported during the current month is giving the green light to Fed officials to raise rates by ¾ of a percent to the 3-3.25% range. Even though there has been speculation that the Fed might go 100 bps, analysts at Societe Generale think otherwise.

“The FOMC meets on the 21 September, and we expect a third 75-bp rate hike. There has been some talk of 100bp, but Fed officials pushed back on that option earlier and we do not expect them to take it now. Longer term, the extension of the SEP through 2025 offers much more insight into their business cycle views,” analysts at Societe Generale wrote.

Silver (XAG/USD) Key Technical Levels