Silver Price Forecast: XAGUSD steadily around $20.30 as US bond yields dive

• Silver price consolidates above $20.00 as the US 10-year bond yield plunges from 3% in the last ten days.
• US ISM PMI remains in the expansionary territory while prices paid by managers tumble.
• Fed’s Kashkari: He will back a 75 bps rate hike if core inflation keeps higher.

Silver price appears to have peaked but finished Monday’s session registering decent gains of 0.17%. The US Dollar weakened on falling US bond yields amidst a dampened mood spurred by increasing tensions between the US and China regarding the visit of US House Speaker Nancy Pelosi to Taiwan. Alongside the aforementioned, US Fed policymakers reiterating the commitment to bringing inflation down turned sentiment sour. At the time of writing, the XAGUSD is trading at $20.34.

Risk-aversion put a lid on XAGUSD prices, as US PMI stays in expansionary territory

US equities finished with losses, while Asian futures are set to open lower. During the North American session, better-than-expected gives the Fed room to operate, as the July ISM PMI reading beat expectations but trailed June’s reading. New orders dropped some, below 50, but it’s worth noticing that the price index component plunged sharply, from 78.50 to 60, as manufacturers began to feel higher interest rates.

In the meantime, the Minnesota Fed President Neil Kashkari commented that he was surprised by the markets’ reaction that the Fed would soon begin to “back off” and said that 50 bps rate hikes at upcoming meetings would be reasonable. He added that higher core inflation readings would push him for another 75 bps increase.

Elsewhere, the US Dollar Index (DXY), a gauge of the buck’s value vs. six currencies, dips to  105.408, down 0.40%, while US Treasuries are tumbling, led by the US 10-year Treasury yield, down at 2.588%.

What to watch

The US calendar will unveil the JOLTs Job Openings, and Fed speaking with Chicago Fed President Charles Evans will cross the wires.

Silver (XAGUSD) Key Technical Levels