Silver Price Analysis: XAG/USD rises despite US yields recovering

• The XAG/USD closes the week with slight gains near the $25.00 area, tallying a six-day winning streak.
• The metal is set to close an 8% winning week.
• USD sell-off stalled amid positive UoM data and a slight US yield recovery.

In Friday’s session, the XAG/USD stands with gains near the $25.00 psychological resistance. Despite US Treasury yields recovering, the precious metal stays resilient while the USD managed to stop the bleeding, still closing its worst week in 2023.

The XAG/USD gained interest due to falling yields during the week. As the US reported that the Core Consumer Price Index (CPI) from the US from June, dropped to 4.8% YoY in June, while the Core Producer Price Index (PPI) slid to 2.6% YoY in the same period, investors started to bet on a less-aggressive Federal Reserve. 

As for now, according to the CME FedWatch tool, markets have priced in a 25 basis point (bps) hike in the next Fed meeting in July, but the odds of another hike in 2023 lowered to around 20% vs 40% at the start of the week. In that sense, US yields sharply declined, and as they could be seen as the opportunity cost of holding the non-yielding grey metal, the price rallied.

To close the week, the US yields recovered with more than 1% increases, but the 2, 5 and 10-year yields are set to close a week of more than 3% declines. 

XAG/USD Levels to watch

The daily chart suggests a positive outlook for the XAG/USD, but after six consecutive days of losses, the price will eventually correct downwards. As for now, the Relative Strength Index (RSI) stands flat near overbought levels, while the Moving Average Convergence Divergence (MACD) seem to be running out of steam.

Resistance Levels: $25.10, $25.40, $26.00.
Support Levels: $23.95, $23.55 (100-day Simple Moving Average), $23.15 (20-day Simple Moving Average).

XAG/USD Daily chart