Silver Price Forecast: XAG/USD broke a bullish pennant, but the rally stalled at the 100-DMA

• Silver surges some 0.22% amid lower US Treasury yields.
• The US Dollar Index advances 0.12%, clings to the 96.00 figure though fails to weigh on XAG/USD.
• XAG/USD Price Forecast: The break of a bullish-pennant pushed silver to the confluence of the 50 and the 100-DMA.

Silver (XAG/USD) advances for the second day in the week, above $23.00 for the first time in a month, during the New York session. At the time of writing, XAG/USD is trading at $23.11, up some 0.60%.

For the second consecutive day, precious metals led by gold and silver climbed as risk appetite improved, coupled with US dollar weakness, as the year-end looms. Nevertheless, the hawkish pivot by the Federal Reserve and the beginning of a faster bond-taper in the middle of January of 2022 put a lid on any silver upward movements, as per Fed policymakers expect at least three rate hikes, on the following year.

In the meantime, the US Dollar Index, which measures the value of the greenback against a basket of its peers, advances some 0.12% at 96.20. in the bond market, the 10-year benchmark note coupon falls one and a half base point sits at 1.465%, a tailwind for XAG/USD, as real rates head nowhere, with 10-year US TIPS at -1.083%.

Silver broke to the upside a bullish pennant of the 1-hour chart during the overnight session, reached a daily high around $23.41, and then retreated towards $23.09.

XAG/USD Price Forecast: Technical outlook

Silver’s daily chart depicts that the non-yielding metal has a neutral-bearish bias. The rally in the overnight session was capped by the confluence of the 50 and 100-day moving averages (DMAs) around the $23.33-45 area, and at press time, XAG bulls achieved to keep the price above the December 27 daily high, $23.09.

To the upside, XAG/USD’s first resistance would be the 100-DMA at $23.33, immediately followed by the 50-DMA at $23.43. A breach of that area would expose the November 25 daily high at $23.70.

On the other hand, the first support would be the December 27 daily high at $23.09. A break below that level would expose $23.00, followed by the December 24 cycle low at $22.59.