Forex News
- Silver hits record at $67.46, extending gains despite firm US Treasury yields and a stronger Dollar.
- Bullish momentum remains strong, with overbought RSI signaling scope for further upside toward $68.00.
- Weak US consumer sentiment and softer durable goods demand reinforce macro tailwinds for precious metals.
Silver (XAG/USD) price rallies to a new all-time high of $67.46 even though US Treasury yields and the US Dollar remain firm on Friday, amid the lack of catalysts, except for the US Consumer Sentiment poll made by the University of Michigan, which showed that US households are trimming spending on durable goods, and are worried about the jobs market.
XAG/ÜSD Price Analysis: Technical Outlook
Price action suggests further upside in Silver prices, as traders could target $68.00. Momentum is strongly bullish as depicted by the Relative Strength Index (RSI), which is overbought with an upward slope.
Conversely, if XAG/USD slides below $67.00, the first support would be the December 19 low of $64.50. Once surpassed, the next stop would be the December 12 swing low of $60.82 ahead of the $60.00 milestone.
XAG/ÜSD Price Chart – Daily
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- Gold holds near $4,344 after rebounding from $4,309, resilient despite higher yields and a firmer US Dollar.
- US consumer sentiment weakens as households expect rising unemployment and cut spending on durable goods.
- BoJ rate hike lifts global yields, but Fed uncertainty and thin holiday liquidity keep gold supported.
Gold (XA/USD) surges during the North American session on Friday, up 0.30% despite rising US Treasury bond yields and of the US Dollar, which is poised to finish the week with modest gains of 0.25%. At the time of writing, XAU/USD trades at $4,344 after bouncing off daily lows of $4,309.
Bullion advances late Friday despite rising US yields, steadier US Dollar
On Friday, the US economic docket is scarce, as the last 'formal' trading week of the year comes to an end, as most trading desks get off for the Christmas holidays. The Consumer Sentiment Index by the University of Michigan for December missed the mark, as people surveyed see a rise in the unemployment rate, and as buying for durable goods tumbled for the fifth straight month.
Earlier, New York Federal Reserve (Fed) President John Williams said that he doesn’t have a “sense of urgency on changing monetary policy.” Williams' posture shifted from dovish to neutral-hawkish as the Greenback recovered some ground, while Gold prices retreated to $4,320, before hitting a daily high.
In the week, Gold prices hit a weekly high of $4,374 on Thursday, but buyers remained reluctant to test the year-to-date (YTD) high of $4,381, as global bond yields rose. US Treasury yields rose as the Bank of Japan increased rates from 0.50% to 0.75% on Friday.
Next week, the US economic docket will be busy on December 23, due to a shortened week by the Christmas holidays. Traders will digest the ADP Employment Change 4-week average, growth figures for Q3 on its preliminary release, October’s Durable Goods Orders and Industrial Production prints for October and November.
Daily digest market movers: Gold price jumps as Consumer Sentiment dips
- Gold price rallies despite both US yields and the US Dollar are posting solid gains. The US 10-year Treasury note yield is up two and a half basis points to 4.147%. US real yields, which correlate inversely with Gold prices, surge nearly three basis points to 1.907%.
- The US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, rises 0.22% to 98.63.
- US Consumer Sentiment was revised down in December from 53.3 to 52.9, felling short of expectations of a print of 53.5. The University of Michigan survey also updated that inflation expectations for one year climbed to 4.2%, while five-year expectations held at 3.2%, indicating that longer-term inflation views remain elevated but stable.
- New York Fed President John Williams said that recent data point to further disinflation, while noting that the uptick in the unemployment rate may reflect temporary distortions, possibly by around one-tenth of a percentage point, and therefore was not a surprising development. He added that he does not sense any urgency to adjust monetary policy at this stage.
- On Thursday, the US Consumer Price Index (CPI) for November rose by 2.7%, below the previous print of 3%. Despite this, economists warned that data should be taken with a pinch of salt, due to the 43-day shutdown of the US government, which could distort some data.
- Expectations that the Fed will cut rates at the next meeting on January 28 remain unchanged at 22%, according to Capital Edge Rate probability data. Nonetheless, for the full year ahead, investors had priced 60 basis points of easing, with the first cut expected in June.
Technical analysis: Gold loses steam as it falls to punch through $4,381 peak
Gold’s uptrend stalled as the yellow metal consolidates ahead of the year’s end. Nevertheless, Bullion is poised to end with an appreciation of more than 60%, set to test $4,500 and $5,000 in the next year.
For a bullish continuation, XAU/USD needs to surpass the record high of $4,381 ahead of $4,400. A breach of the latter exposes $4,450 and $4,500. On the other hand, if Gold slides below $4,300, traders could challenge the December 11 high at $4,285, followed by $4,250, and the $4,200 psychological mark.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
The US Dollar Index (DXY) is on a three-day winning streak, although gains are modest, the index is heading into the weekly close near the 98.60 price region, after a softer-than-expected United States (US) Consumer Price Index (CPI) was released on Thursday, briefly weighing on the US Dollar. Doubts about the quality of the inflation slowdown arose on Friday, following comments from Federal Reserve (Fed) John Williams, who noted that CPI data “may have been pushed down a bit” when speaking on CNBC. The Fed announced its monetary policy decision on Wednesday, and as expected, policymakers cut the interest rate by 25 basis points (bps)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | -0.06% | 1.20% | -0.01% | -0.08% | 0.16% | 0.09% | |
| EUR | -0.00% | -0.07% | 1.22% | -0.02% | -0.08% | 0.17% | 0.09% | |
| GBP | 0.06% | 0.07% | 1.26% | 0.05% | -0.02% | 0.23% | 0.15% | |
| JPY | -1.20% | -1.22% | -1.26% | -1.18% | -1.26% | -1.02% | -1.09% | |
| CAD | 0.01% | 0.02% | -0.05% | 1.18% | -0.08% | 0.16% | 0.10% | |
| AUD | 0.08% | 0.08% | 0.02% | 1.26% | 0.08% | 0.25% | 0.17% | |
| NZD | -0.16% | -0.17% | -0.23% | 1.02% | -0.16% | -0.25% | -0.08% | |
| CHF | -0.09% | -0.09% | -0.15% | 1.09% | -0.10% | -0.17% | 0.08% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Additionally, data released by the US Department of Labor (DOL) on Thursday indicated that the number of Americans filing new unemployment claims rose to 236,000 for the week ending December 13. There were 224,000 Initial Jobless Claims, a decrease of 13,000 from the previous week's revised level, the US Department of Labor (DOL) reported on Thursday. This reading came in better than the market expectation of 225,000.
EUR/USD: The pair is trading near the 1.1740 price zone after the European Central Bank (ECB) left interest rates unchanged and ECB President Christine Lagarde refused to commit to any particular rate path on Thursday. Lagarde affirmed that the decision was taken unanimously and that there was no discussion of changing interest rates.
The GBP/USD pair is trading near the 1.3380 price region, ending the week pretty much unchanged. Sales in the United Kingdom (UK) rose by 0.6% YoY in November, unchanged from the previous print but missing estimates of a 0.9% expansion. On a monthly basis, figures fell by 0.1%, below forecasts of a 0.4% expansion. The Office for National Statistics (ONS) reported a day after the Bank of England (BoE) cut rates due to cooling inflation. The BoE cut the interest rate by 25 (bps) to 3.75% from 4%, as expected. The monetary policy statement showed policymakers are less worried about inflation than the numbers suggested, leading to some Sterling Pound gains.
4%, as
USD/JPY is trading near the 157.30 price region, nearing a one-month high as Bank of Japan (BoJ) members unanimously voted to raise the policy rate by 25 bps to 0.75% (widely expected) and reinforced their tightening bias.
AUD/USD is trading near the 0.6620 price region, as data released in Australia earlier this week showed that Consumer inflation expectations rose to 4.7% in December from 4.5% in November. Meanwhile, the case that the RBA might hike interest rates in the first quarter of 2026, but the impact on the Aussie has been minimal.
USDCAD trades in the 1.3780 price region on the Canadian side; domestic data offered little support to the Loonie. Statistics Canada reported that Retail Sales fell by 0.2% MoM in October, missing market expectations for a flat reading and improving from September’s sharp 0.9% decline.
Gold is little changed, still on the greener side of the grass as a dovish Fed outlook and persistent geopolitical risks continue to provide a steady tailwind for prices, keeping the metal on track to end the week with modest gains.
Anticipating economic perspectives: US updates and Japanese data
The UK will release the final estimate of the Q3 Gross Domestic Product (GDP) on December 22.
The United States will publish the October Durable Goods Orders and a preliminary estimate of Q3 GDP on December 23.
The Christmas Holidays will put most of the macroeconomic calendar on pause, except in Japan. The Asian country will release the December Tokyo Consumer Price Index (CPI) data and Retail Trade figures on December 25, when BoJ Governor Kazuo Ueda will also offer a speech.
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
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