Silver under pressure on US dollar strength, eyes on Fed speakers

• The greenback is the focus for the open as it continues to gain across the board n forex.
• Precious metals on the backfoot as the Fed turns up the heat.

XAG/USD will start of the week on the backfoot following a drop of around 0.50%, on Friday, ending at $25.7803 and moving between a low of $25.7560 and $26.4997. 

In a risk-off environment due to 7 of 18 FOMC members feeling that a first-rate hike could come in 2022, the greenback is in favour as the search for carry still sees strong demand at the long end of the curve which is weighing on precious metals. 

The moves in the shorter end of the US yield curve are a dollar positive and there will be several Federal Reserve speakers every day this week to potentially underpin the greenback. Markets will be on the lookout for any new language on tapering from the Fed speakers. 

Any views to coalesce around tapering actually starting in September as opposed to later on in the year will be adding fuel to the greenback’s fire and potentially push markets over the edge.

XAG/USD technical analysis

Bears are pressuring weekly support at these lows and if the dollar continues its trajectory, a restest of the late March lows of $23.78 could be on the cards for the near future. 

However, if support holds, then a significant retracement could be on the cards back to test old lows.