Silver Price Forecast: XAGUSD surges above $20.00, registers its biggest weekly gain since August 2020

• Silver price posts its first weekly gain in the last nine weeks, up by 9%.
• Falling US Treasury yields undermine the greenback and bolstered precious metals prices.
• Fed officials are confident of achieving a soft landing while acknowledging that further rate hikes are needed.

Silver Price rises for four consecutive days, breaking above the $20.00 figure for the first time since July 5, preparing to finish the week with gains of almost 9%., despite higher than expected US inflation data, namely the PCE, the Fed preferred inflation gauge, exceeding estimations. XAGUSD traders ignored the news and held the white metal price at around $20.25, up 0.11% at the time of writing.

Silver rallies amidst an upbeat sentiment

Global equities remain to trade positively, reflecting an upbeat sentiment. Meanwhile, the US Department of Commerce revealed that June’s Personal Consumption Expenditure rose 1% MoM, higher than 0.9% estimations. Annually based, edged higher by 6.8%, vs. 6.7% foreseen by analysts.

Late during the day, the University of Michigan reported the Consumer Sentiment on its final reading for July, which rose 51.5, above estimations. In the same survey, American inflation expectations for a horizon of 5 years uptick from 2.8% (preliminary) to 2.9%, though less than June’s readings.

Fed’s Bostic and Waller crossed wires

During the New York session, Atlanta’s Fed President Raphael Bostic said that the Fed is “going to have to do more in terms of interest-rate moves.” Bostic said he does not think the country is in a recession after Thursday’s weaker than estimated Advanced GDP for the second quarter at -0.9%. In the meantime, Christopher Waller said that “a soft landing is a plausible outcome for the labor market going forward,”

In the meantime, US bond yields have fallen significantly since Wednesday, after the US Federal Reserve hiked rates by 75 bps. The US 10-year Treasury yield fell from weekly highs around 2.845% to 2.636%, down 20 bps, a tailwind for precious metal prices.

Worth noting that the US 2s-10s yield curve inversion, bull flattened during the week, but at the time of writing, is further deepening at -0.255%, further fueling expectations of an upcoming recession in the US.

Therefore, undermined by falling US Treasury yields, the greenback has weakened, as shown by the US Dollar Index (DXY). The DXY is losing 0.54% in the week, sitting at 106.000.

What to watch

Next week, the US economic docket will feature S&P Global and ISM Manufacturing, Services, and Composite PMIs. Alongside that, the US Nonfarm Payrolls report, alongside Fed speaking, would dominate news headlines.

Silver (XAGUSD) Key Technical Levels