Silver Price Forecast: XAG/USD advances modestly on mixed US housing and jobs data

• Silver prices rise 0.50% supported by a softer USD and positive Wall Street performance.
• XAG/USD’s trajectory influenced by US economic data, including strong Jobless Claims and mixed housing data.
• Market risk sentiment, shaped by Middle East geopolitical concerns, including Israel-Hamas tensions, impacts Silver prices.

Silver’s advance in the mid-North American session on Thursday, sponsored by US Treasury yields, stands steady, while the Greenback (USD) posts decent gains as revealed by the US Dollar Index (DXY). Therefore, the XAG/USD exchanges hands at $22.62 after bottoming around $22.43, up 0.38%.

XAG/USD’s clings to decent gains on geopolitical risks, amid mixed US data

Market sentiment turned positive as Wall Street registered solid gains, between 0.20% and 0.75%, except for the Dow Jones, tumbling 0.23%. US Treasury bond yields, in the short end of the curve, remain unchanged, while the belly and the long-end post gains of between four to six basis points, capping Silver’s advance.

On the data front, unemployment claims revealed by the US Department of Labor added to strong retail sales posted in December, while industrial production recovered after back-to-back months of contraction and stagnation. Initial Jobless Claims for the last week rose by 187K, below forecast and previous month’s data.

US Housing Starts slid from 1.525 million to 1.46 in December, a -4.3% contraction. Contrarily, Binding Permits rose 1.9% or 1.495 million, compared with November’s 1.467 million, and exceeded forecasts of 1.48 million.

In the meantime, Atlanta’s Fed President Raphael Bostic emphasized that he’s open to rate cuts if inflation drops faster than expected. He commented that monetary policy could start in July “if there’s convincing evidence inflation is slowing faster.”

Given the fundamental backdrop, Silver could likely remain underpinned by a soft US Dollar. That, along with geopolitical concerns in the Middle East, with the conflict of Israel-Hamas spurring a crisis that had spread into the Red Sea, involving Houthis and an alliance between the US and the UK.

XAG/USD Price Analysis: Technical outlook

Silver’s daily chart portrays the grey metal neutral-downward biased, following the formation of a ‘death-cross,’ with the 50-day moving average (DMA) crossing below the 200-DMA, which could exacerbate further losses in the near term. The next demand zone on the downside would be the $22.00 figure ahead of the November 13 low of $21.88. On the upside, if XAG/USD buyers push prices above the $23.00 mark, that could pave the way to challenge the 200-DMA at $23.55.