#XAGUSD @ 20.405 On Monday, silver is climbing solid, courtesy of falling US Treasury bond yields, meaning US bond real yields are down, a tailwind for precious metals. (Pivot Orderbook analysis)

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• On Monday, silver is climbing solid, courtesy of falling US Treasury bond yields, meaning US bond real yields are down, a tailwind for precious metals.
• The US Dollar is also down by more than 0.50% after US manufacturing activity dropped but remained above recessionary territory.
• Traders are focused on Tuesday’s data ahead of Friday’s US Nonfarm Payrolls report.

The pair currently trades last at 20.405.

The previous day high was 19.29 while the previous day low was 18.78. The daily 38.2% Fib levels comes at 19.1, expected to provide support. Similarly, the daily 61.8% fib level is at 18.97, expected to provide support.

Silver price rallies sharply as the fourth quarter begins, amidst a risk-on impulse in the financial markets, due to overnight news that the newest UK government has backpedaled with some tax cuts, easing traders’ fears. Demand for US Treasures jumped, so yields edged lower, meaning higher precious metals prices. At the time of writing, the XAG/USD is trading at $20.35 a troy ounce in the North American session.

US equities portray a positive sentiment across the board. The Institute for Supply Management (ISM) reported that manufacturing activity grew at the slowest pace in 2 and half years in September, dropping to 50.9, below August 52.8, but staying in expansionary territory, negating the “technical recession” in the US, as 2022 Q1 and Q2 GDP showed negative readings. In the same report, New Orders dropped to 47.1 from 51.3, while prices paid edged lower.

The US data began to flash the effects of the Fed’s tightening monetary conditions. Since Fed officials remained with their hawkish rhetoric throughout the last week, market players should expect additional rate hikes by November’s meeting, namely 75 bps.

Meanwhile, the US Dollar Index, a gauge of the buck’s value vs. a basket of peers, edges down by 0.57% down at 111.546, while the US 10-year Treasury bond yield collapses 25 bps to the 3.582% threshold, a headwind for the greenback.

Therefore, the fall in US 10-year TIPS yield, a proxy for real yields, is down at 1.45%, after reaching a YTD high at 1.70%, further explaining the appreciation of precious metals.

On Tuesday, the US economic docket will feature Durable Goods Orders, alongside JOLTs Jobe Openings, ahead of September’s Nonfarm Payrolls report, revealed on Friday.

Technical Levels: Supports and Resistances

XAGUSD currently trading at 20.36 at the time of writing. Pair opened at 19.04 and is trading with a change of 6.93 % .

The pair is trading above its 20 Daily moving average @ 19.0, above its 50 Daily moving average @ 19.3 , above its 100 Daily moving average @ 20.05 and below its 200 Daily moving average @ 21.96

The previous day high was 19.29 while the previous day low was 18.78. The daily 38.2% Fib levels comes at 19.1, expected to provide support. Similarly, the daily 61.8% fib level is at 18.97, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 18.78, 18.52, 18.27
• Pivot resistance is noted at 19.3, 19.55, 19.81

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