Silver Price Forecast: XAG/USD refreshes two-month high as US doubles bond buyback plan

Silver price (XAG/USD) reached a two-month high of $67.33 during Asian trading hours on Thursday. This surge occurred as U.S. long-dated Treasury yields fell sharply following the Treasury Department's announcement to double buybacks for such securities. The increase in USD supply into the economy weighed on the currency. As of now, 10-year U.S. Treasury yields hovered near Wednesday's low of 4.64%, while 30-year yields dropped almost 2% from the prior close to around 5.18%.

The U.S. Dollar Index (DXY) traded near its seven-week low at 98.77. Lower interest rates boost the appeal of non-yielding assets like Silver. The Federal Open Market Committee (FOMC) minutes from their July meeting suggested that several committee members believed interest rates needed to rise if inflation persisted. The XAG/USD pair traded above $67.10, surpassing the 20-period Exponential Moving Average (EMA) of $63.20 and maintaining a bullish near-term outlook.

The Relative Strength Index (RSI) at 61.48 indicated positive momentum without reaching overbought levels, pointing to continued upside potential. On the downside, strong support can be found at the recent pivot near $67.10, followed by 20-period EMA support at $63.20. Silver's price could rise to $70.00, potentially surpassing the June 16 high of $71.19.

Silver is a precious metal used for its intrinsic value and as a hedge against high inflation. Investors can acquire Silver through physical ownership or via Exchange Traded Funds. Silver prices fluctuate due to various factors, including geopolitical events, economic conditions, and investment demand. Its price is also influenced by the strength of the U.S. Dollar, as Silver is priced in USD. Silver typically moves with Gold, and its valuation can be assessed through the Gold/Silver ratio.