News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Wall Street Futures Update: Dow Jones (-0.003%) S&P 500 (+0.073%) Nasdaq 100 (+0.021%) [delayed] -BBG
  • (Sentiment Weekly) Japanese Yen, Swiss Franc Analysis: USD/JPY, USD/CHF May Fall as Long Bets Rise #Yen #Franc $USDJPY $USDCHF https://www.dailyfx.com/forex/technical/article/special_report/2021/04/14/Japanese-Yen-Swiss-Franc-Analysis-USDJPY-USDCHF-May-Fall-as-Long-Bets-Rise.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/6EXLAB614y
  • Retail traders appear to be reducing long exposure in the Euro after recent gains. This hints that EUR/USD and EUR/JPY may rise in the near term, but could this trend last down the road? Find out from @ddubrovskyFX here:https://t.co/Y1d4DXeKEE https://t.co/JmGCbxkfWp
  • Gold Prices Probe Barrier as Inflation Data Sinks the USD and Yields https://www.dailyfx.com/forex/market_alert/2021/04/14/Gold-Prices-Probe-Barrier-as-Inflation-Data-Sinks-the-USD-and-Yields-.html https://t.co/bdNaQQsMqu
  • The Indian Rupee rose as the Nifty 50 slightly fell after the RBI left benchmark rates unchanged despite recent weakening inflation and a massive fiscal spending plan. Will USD/INR bounce? Find out from @ddubrovskyFX here:https://t.co/SwufKMOwfQ https://t.co/R2XfXKiRT5
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.65%, while traders in France 40 are at opposite extremes with 80.44%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/gxv7FwyhsM
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.50% 🇦🇺AUD: 0.26% 🇬🇧GBP: 0.16% 🇨🇭CHF: 0.11% 🇪🇺EUR: 0.10% 🇨🇦CAD: -0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/hQBjkAnaA1
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: France 40: 0.35% Germany 30: 0.04% US 500: 0.00% FTSE 100: -0.06% Wall Street: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/VrybX61UEU
  • British Pound Price Outlook: GBP/USD, GBP/JPY Poised to Extend Climb - https://www.dailyfx.com/forex/technical/home/analysis/gbp-usd/2021/04/14/British-Pound-Price-Outlook-GBPUSD-GBPJPY-Poised-to-Extend-Climb.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $GBP $GBPUSD $GBPJPY https://t.co/rDOIqMJQfk
  • The US Dollar may extend gains against the Thai Baht. But, its price action within USD/SGD, USD/PHP and USD/IDR seem to be favoring more range-bound trading conditions. Get your market update from @ddubrovskyFX here:https://t.co/DYCLXAFcCr https://t.co/q3hRzYvE7n
Silver Price Forecast: Biden Infrastructure Plan May Direct XAG/USD Higher

Silver Price Forecast: Biden Infrastructure Plan May Direct XAG/USD Higher

Thomas Westwater, Analyst

Silver, XAG/USD, President Biden, Stimulus Spending, Inflation Bets – Talking Points

  • US President Biden’s infrastructure announcement may ignite a rally in silver prices
  • Silver may exit consolidation phase to track market-based inflation expectations higher
  • XAG/USD looking at the 200-day Simple Moving Average for support after March selloff
The Quiz
Discover what kind of forex trader you are
Start Quiz

Silver investors may get a big driver this week in the form of US President Biden’s infrastructure-focused stimulus announcement. Mr. Biden will outline his plan in Pittsburgh on Wednesday, according to White House administration officials. To avoid GOP resistance, the infrastructure plan will reportedly be separate from other priority legislation such as healthcare and child care funding, according to Biden aides cited in the Wall Street Journal.

Silver may benefit from the announcement, with many looking at the precious metal – which also has applications in industry – to be an inflation hedge. However, market-based inflation expectations implied in breakeven rates have continued to move higher even as silver veered off downward recently. Divergence may continue until a realized inflationary pickup is reflected in CPI and PCE figures.

Regardless, the plan, which will focus on roads, bridges, airports, and green energy initiatives, will most likely be larger in size than any similar initiative before it. Many are estimating the size of the package to be in the trillions, likely near $3 trillion to start, although negotiations with Republicans – who worry about tax increases to fund the measures – may see the final total revised lower.

That said, inflation expectations are likely to rise further following this week’s announcement. Breakeven rates, which measure price growth expectations by tracking the difference between yields on nominal and inflation-adjusted Treasury bonds (TIPS), have been on the rise since crashing last March. Since Mr. Biden took office however, the 5-year breakeven has accelerated past the 10-year breakeven rate, a reflection of the new administration’s willingness to quickly spend more to stimulate the economy.

Overall, the pickup in inflation expectations may bode well for silver prices. An argument can be made that silver is merely in a phase of consolidation after a large run in 2020, and the upcoming green-focused infrastructure bill may be the catalyst needed to propel the metal to new heights. That may very well be the case, although any proposal will first need to test the waters in Congress. Given these points, silver investors will want to watch the Biden administration closely this week, particularly Wednesday’s announcement from the President himself.

Silver vs breakeven

Silver Price Technical Forecast

Silver is down nearly 6% on the month, and XAG/USD is now trading directly above its 200-day Simple Moving Average (SMA). So far, this key barrier appears to be providing a level of support, with prices remaining above the psychologically important 25 handle, which also coincides with the 78.6% Fibonacci retracement of the December to February move.

A break below the 200-day SMA would likely see additional selling pressure mount, perhaps with a move down to the 22.597 area that supported swings lower during the September and November selloffs last year. XAG/USD’s MACD oscillator is skewed to the bearish side as it trends lower. Alternatively, if prices continue to hold above support, a retest of trendline support from the March 2020 swing low remains on the cards to reestablish a bullish technical posture.

XAG/USD Daily Price Chart

xag chart silver

Chart created with TradingView

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwateron Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES