Silver (XAG/USD) Daily Outlook Update Silver (XAG/USD) prices are down 1.25% and now trading at $63.60 in the European session on Thursday. The precious metal is under heavy selling pressure after hawkish comments from John Williams, a permanent voting member of the New York Federal Reserve (Fed) Bank, during the European session. Fed’s Williams said the central bank is very concerned about rising inflationary pressures. About the US interest rate forecast, Williams of the Fed commented, “It’s reasonable to see another rate increase by the end of the year.” Fed’s Williams offers an especially hawkish tone, as evidenced by a 7.2/10 FXS Speechtracker score, which exceeds the historical average of 6.2/10, suggesting optimism in US economic resilience and lower risk to maximum employment. Mentioning that “the big challenge is inflation,” acknowledging “pretty strong demand for AI,” and that another interest rate hike is “reasonable” by the end of this year all suggest a tone of openness to more tightening even when forward guidance becomes more muted. The FXS Fed Sentiment Index fell 0.18 points to 148.63, which means a slight cooling in the perception of the Fed’s hawkish tone. Despite the fall, the Index still signals a firmly hawkish Fed tone, far above the 100 neutral level, supporting the USD even as doubts grow about the sustainability of higher yields. Silver prices were already weak due to gains in US Treasury yields amid renewed expectations of rate hikes by the Federal Reserve. As per CME’s Fed Watch Tool, the probability of the central bank making a rate hike decision at either of the two policy meetings that will be held in the current year has risen to 55% compared to 42.3% observed earlier on Tuesday. The 10-year US Treasury yield has been moving higher, touching 5.14% after comments from Federal Reserve Bank of New York President Williams, the highest in more than 19 years. Higher yields on interest-paying instruments tend to weigh on non-interest-paying assets such as Silver. The daily chart of XAG/USD shows the currency pair trading around $63.79. Bearish sentiment prevails in the near term, as XAG/USD trades below the 20-day exponential moving average (EMA) at $65.15. After reaching a recent top, the precious metal retreated, and now trading below this key dynamic resistance level means any further upward push will run into a ceiling unless gh buyers step in to take it. RSI is at 46.18, which means bearish pressure is weak and does not indicate an oversold condition. In the near term, the first key upside resistance is the 20-day EMA at $65.15. Closing above it on a daily chart would help relieve current downward pressure and create conditions for further recovery. In turn, the most important support level will be the August 19 low at $62.19.
