XAG/USD caught a broad-market risk appetite surge on Wednesday as investors continue to lean heavily into bets that the Federal Reserve (Fed) will start cutting interest rates in 2024, with some expecting the first cuts to begin as soon as March of next year.
Spot Silver is leaning notably bullish as markets wrap up 2023 with a thin, shortened post-holiday trading week, keeping XAG/USD pinned into a familiar but rough near-term range, caught between $24.00 and $24.60.
US Treasury yields are easing back and the US Dollar is slumping further as investors pile into Fed rate cut bets, with the US 2-year Treasury yield slipping to 4.26% after starting Wednesday near 4.3%. As investors ramp up risk bids on rate cut expectations, the 2-year Treasury yield has fallen to its lowest level since May of this year, but Silver is seeing only limited knock-on bidding from broad-market risk flows.
Spot Silver caught a batch of bids back into the $24.40 region after seeing a sloppy bounce from the 200-hour Simple Moving Average (SMA) near $24.10, and XAG/USD is now caught into familiar congestion points that have plagued Spot Silver markets in the near-term.
XAG/USD has spent most of the year trapped in a rough cyclical pattern, circling the 200-day SMA near $23.50 as Silver struggles to capitalize meaningfully on broad-market Greenback bearishness.
The outlook heading into 2024 is leaning cautiously bullish as the 50-day SMA gears up for a bullish cross of the 200-day SMA, which could provide technical support for any pullbacks, but topside momentum remains limited and could pose a risk for any overextended long buildups.


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