Silver Price Forecasts: XAG/USD holds below $64.00 amid Fed hiking bets, higher yields

Silver (XAG/USD) is trading within a narrow range, showing limited upside potential as it hovers just below $64.00, marking a 3.7% decline over the past week. The bears are keeping a close eye on the lower end of the monthly trading range, currently sitting at $62.30. In recent weeks, precious metals have faced challenges as US Treasury yields have risen across the curve, and Fed officials have signaled more interest rate hikes ahead.

Factors such as robust US economic activity, growing inflationary pressures due to higher oil prices, and worries about the nation's ballooning debt have contributed to this surge in Treasury yields, which are now at multi-year highs, putting a strain on the value of yield-free precious metals. Additionally, the hawkish statements from the Federal Reserve have further supported this bearish sentiment.

The XAG/USD pair is currently trading at $63.81, near the lower end of the monthly range between $62.20 and $62.30, and technical indicators such as the Relative Strength Index (14) and Moving Average Convergence Divergence (MACD) both suggest an ongoing bearish trend. A breach of the $62.20-$62.30 zone could trigger a bearish Head and Shoulders pattern, potentially driving the price lower towards the August 6 low of $60.87 and the August 5 low of $59.35.

Resistance on the upside is anticipated around the $64.60 level (September 22 low), with the August 6 low at $60.87 also presenting a potential downside target. Among other currency pairs, the US Dollar has been particularly strong, particularly against the Australian Dollar, indicating a broader trend of US economic strength.