XAG/USD surged above $28.00 to its highest level in nearly three years.

• Silver reached $28.32, boosted by falling U.S. Treasury yields and a weaker dollar despite the Federal Reserve’s hawkish view.
• The Israeli prime minister’s comments added to geopolitical tensions and pushed up precious metal prices.
• The market looks to US CPI for inflation insights. The Federal Reserve has pledged to tackle inflation.

Silver rebounded to its highest level in nearly three years on June 10, 2021, as the gray metal broke through a key resistance level. Buyers are eyeing the May 2021 high. Factors such as a weaker U.S. dollar and falling U.S. Treasury yields are supporting the precious metal amid speculation of a less dovish Federal Reserve. XAG/USD trades at $28.00 per troy ounce after hitting a multi-month high of $28.32.

XAG/USD broke above $28.00 as falling U.S. Treasury yields and geopolitical uncertainty increased demand for safe assets.

A sudden reversal in U.S. Treasury yields led to a rally in precious metals. After rising 15 basis points over the past two trading sessions, the US 10-year benchmark index fell 5 basis points to 4.37%. That and the softer Greenback backed Silver’s final legs above the $28.00 threshold.

Geopolitical risks are costing and supporting precious metals. Israeli Prime Minister Benjamin Netanyahu has said he will complete the elimination of Hamas brigades, including those in Rafah, and that nothing can stop it. In the meantime, Israel’s ceasefire proposal was rejected by Hamas.

Market participants are eagerly awaiting the release of the latest inflation report from the United States (US). The monthly consumer price index (CPI) is expected to ease, but the annual figure is expected to be higher than in February. Core CPI is expected to decline in both numbers.

Fed policymakers have crossed a line. The most recent to be in the news was Neil Kashkari of the Minnesota Federal Reserve. He said the U.S. central bank cannot fall short in the fight against inflation.

XAG/USD Price Analysis: Technical Outlook

The daily chart shows that XAG/USD could continue to rise above $28.00, but the Relative Strength Index (RSI) has turned overbought, triggering a decline. This can be viewed as the trader booking a profit.

If the retracement continues, silver’s next support level would be $27.50 before testing the April 8 low of $26.87. On the other hand, a resumption of the uptrend would pave the way for a test of $28.32 ahead of an advance towards $29.00.