Key Moments
- XAG/USD slips about 1% to near $61.80 after a four-session advance.
- Traders look ahead to the upcoming FOMC minutes for additional clues on U.S. rate policy.
Silver Pulls Back After Four-Day Advance
Silver (XAG/USD) is trading lower in the Asian session on Monday, giving back part of its recent gains. The metal is down 1% around $61.80, reversing course after rising for four consecutive trading days.
Despite the current setback, the corrective move is perceived as potentially short-lived. Market participants are increasingly positioned for additional weakness in oil prices, a scenario that would further ease global inflation expectations and could underpin demand for Silver.
Over the past few months, Silver has been under notable selling pressure as a sharp rally in oil – fueled by energy supply disruptions linked to the Middle East conflict – weighed on sentiment toward the metal.
Oil Price Outlook and Impact on Silver
Analysts at Citi noted in a recent report that Brent Crude Oil could retreat to $60 by year-end, as “fundamentals rapidly reasserting themselves as Hormuz disruptions fade and shipping flows are normalizing.”
During Asian trading, Brent Crude Oil is down 0.5% around $71.80, hovering near the five-month low of $70.26 recorded on Thursday. Continued softness in crude prices is viewed as a factor that may help contain further downside in XAG/USD.
Fed Expectations and Upcoming FOMC Minutes
Shifts in expectations for U.S. monetary policy are also influencing Silver. A modest pullback in anticipated Federal Reserve interest rate increases following last Thursday’s United States Nonfarm Payrolls (NFP) report is seen as supportive for the metal.
Data from the CME FedWatch tool show that the probability of the Fed implementing at least one additional rate hike by the end of September stands at 53.2%, down from 59.4% a week earlier.
Looking ahead, investors will closely monitor the release of the Federal Open Market Committee (FOMC) minutes from the June meeting on Wednesday for further insight into policymakers’ views on the path of interest rates.
Technical Picture for XAG/USD
At the time of writing, XAG/USD is trading near $61.94, under pressure following a mean-reversion move toward its 20-day Exponential Moving Average (EMA), currently around $63.53.
The Relative Strength Index (RSI) is hovering near 42 after bouncing from the 20.00-40.00 band. This suggests that while the intense downside momentum has eased, the broader bearish bias remains intact.
| Technical Level | Price | Implication |
|---|---|---|
| Current price (approx.) | $61.94 | Trading below key short-term average |
| 20-day EMA | $63.53 | Immediate resistance; daily close above would ease bearish bias |
| Upside target 1 | $67.17 (June 22 high) | Potential next resistance if 20-day EMA is cleared |
| Upside target 2 | $70.00 | Further objective on sustained recovery |
| Key downside level | $55.63 (June 24 low) | Break below could signal a new leg lower |
On the upside, the first key barrier is the 20-day EMA at $63.53. A daily close above this level would be required to alleviate the current negative bias and pave the way for a more durable rebound, initially toward the June 22 peak at $67.17, followed by the $70.00 area.
On the downside, if selling pressure resumes and XAG/USD breaks below the June 24 low at $55.63, the metal could be vulnerable to another bearish leg.
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