Silver (XAG/USD) trades on the back foot on Friday as rising US Treasury yields outweigh support from a weaker US Dollar (USD). At the time of writing, XAG/USD trades around $57.50, down 2% on the day and on track to close July in negative territory.
The US Dollar stays under pressure following suspected intervention by Japanese authorities to support the Japanese Yen (JPY). The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, hovers around 100, near six-week lows.
Meanwhile, US Treasury yields move higher as elevated energy prices keep inflation risks tilted to the upside, reinforcing expectations that the Federal Reserve (Fed) may maintain tighter monetary policy or raise interest rates later this year. Hawkish Fed expectations weigh on non-yielding metals such as Silver, as higher borrowing costs increase the appeal of interest-bearing assets.
While macroeconomic headwinds persist, the technical outlook points to signs of near-term stabilization within the broader bearish structure.
On the daily chart, XAG/USD is consolidating above the $55 support area. However, the broader structure stays bearish as Silver trades below the 21-day, 50-day and 100-day Simple Moving Averages (SMAs).
The Relative Strength Index (RSI) near 44 sits below the neutral 50 level, pointing to subdued buying pressure. Meanwhile, the positive Moving Average Convergence Divergence (MACD) reading suggests that downside momentum is easing.
On the upside, initial resistance is seen at the 21-day SMA near $58.50. A daily close above this level could support a recovery towards the 50-day SMA at $63, followed by the 100-day SMA near $70.
On the downside, immediate support is seen at the horizontal level around $55, with a deeper floor near $45 if selling resumes, keeping the metal vulnerable while it trades beneath its key moving averages.
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