- Silver takes offers around intraday low, drops for the second consecutive day.
- US dollar picks up bids as bond bears return, market turns cautious ahead of the key events.
Silver stays depressed near the intraday low of $25.59, down 0.54% on a day, during early Tuesday. While Turkish action and strong equities weighed on the white metal the previous day, US dollar gains could be traced for the quote’s latest weakness.
US dollar index (DXY) marks a recovery from 91.75, currently up 0.05% to 91.83, as Treasury yields regain traction. The US 10-year Treasury yield adds one basis point (bp) towards 1.70% by the press time. US Treasury yields not only propel US dollar but also recently weigh on equities and commodities.
It’s worth mentioning that the Western tussle with China and cautious sentiment ahead of the key testimony by US Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen could be cited as responsible for the bond bears’ return.
During their latest comments, Fed Chair Powell cites challenges to the economic recovery while justifying the need for further stimulus whereas Yellen eyes full employment in 2020. It should be noted that the Fed Governor Bowman feared challenges for small firms and added to the risk-off mood.
Furthermore, the US, Canada, the UK and the European Union (EU) have joined against China’s human rights violations in Xinjiang and escalated the Western fight against the Asian major. The same could also be looked at as a risk-negative catalyst. Additionally, virus and vaccine jitters are extra toppings for the current scenario.
Moving on, the stated testimony by Powell and Yellen will be the key for the market while geopolitical and virus-related headlines shouldn’t be missed as well.
Technical analysis
Unless crossing a confluence of 50-day SMA and a short-term resistance line near $26.40, silver buyers shouldn’t return to the desk.