Silver( surge slows down, re-examining bond yield relationship... facing $54.50 resistance level

Technical Strength Continues but Resistance Holds

Spot silver(XAG/USD) has faced resistance near $52 per ounce, entering a correction phase. Currently trading around $51.94 on the daily chart, silver has risen for three consecutive trading days but still has some distance from the all-time high of $54.50.

From a technical perspective, positive signals remain. The price is above the 20-day exponential moving average(EMA), and the Relative Strength Index(RSI) is at 59.15, above the 50 level but not yet overbought. This suggests room for further upside.

However, a temporary weakening of the upward momentum cannot be ruled out. If the RSI reverts toward the 50 level or the 20-day EMA weakens, a sideways trading range could develop. Support levels are expected at $50.40(20-day EMA) and the September 23 low of $44.47.

Declining Treasury Yields Drive Silver Buying

The main factor supporting silver prices is the decline in U.S. Treasury yields. The 10-year U.S. Treasury yield is around 4.00%, but on a weekly basis, it has fallen approximately 3.4%. Due to the inverse correlation between bond yields and silver, demand for silver, a non-yielding asset, increases.

This decline in Treasury yields is driven by expectations of additional rate cuts by the Federal Reserve(Fed). According to CME(CME) FedWatch data, the probability of a 25 basis point rate cut at the December meeting has risen from 50.1% a week ago to 85.3% now.

Fed Chair Candidate Considerations and Policy Shift

Market expectations suggest an acceleration of the Fed’s easing stance. New York Fed President John Williams recently stated, “While current monetary policy is restrictive, recent measures have eased the tightening, and there is room for short-term adjustments.” This is interpreted as a signal of potential further rate cuts.

Political factors also warrant attention. Among the candidates being considered to succeed Fed Chair Jerome Powell are individuals associated with former President Donald Trump. If they join the Fed decision-making body, they could pressure for an early end to the current high-interest rate policy, potentially accelerating the cycle of monetary easing in the medium to long term.

Short-Term Outlook: Monitoring Treasury Yields is Essential

Silver’s short-term direction will largely depend on movements in Treasury yields and signals from Fed policy. As long as it remains above the 20-day EMA, upside momentum remains valid, but whether it can break through the resistance at $54.50 will be a key inflection point determining future upward acceleration.