• Silver edges higher for the second consecutive day, up some 0.72%.
• Goldman Sachs and Deutsche Bank estimate four rate hikes in 2022, while JP Morgan brought forward its first hike to March.
• XAG/USD is downward biased as the 50-DMA crossed under the 100-DMA, spurring a $1.00 drop.

Silver (XAG/USD) advances during the New York session, despite the greenback rising firmly in the session, trading at $22.47 at the time of writing. Risk-appetite conditions remained dampened since the European session, spurred by expectations of higher rates as investors assess the last US employment report. Additionally, Goldman Sachs revealed that they expect four Federal Reserve rate hikes.

Some commercial banks expect four Fed hikes in the year

In the European session, a report emerged that Goldman Sachs, the North American investment bank, expects four hikes to the Federal Funds Rate. Also, the bank noted that the US central bank would begin reducing its balance sheet by July of 2022, if not earlier.

On Friday, JP Morgan brought forward the first rate hike from June to the March 2022 meeting. In the meantime, Deutsche Bank said it expects four increases to the Federal Funds rate (FFR) after the Nonfarm Payrolls report.

In the last week, FOMC’s December meeting minutes revealed that the Federal Reserve is ready to raise rates and discussed the possibility of reducing its $8 Trillion balance sheet that could begin as soon as the US central bank began raising rates.

In the meantime, in the bond market, the US 10-year benchmark note rises almost two basis points, up at 1.789%, a tailwind for the US Dollar Index, which advances some 0.40%, sitting at 96.15 at press time.

Market participants’ attention turns to US inflation data and the testimony of Federal Reserve policymakers Jerome Powell and Lael Brainard against the US Senate Banking Commission this week for more clues regarding the speed of monetary policy normalization.

XAG/USD Price Forecast: Technical outlook

Spot silver has a neutral-downward bias. The 50-day moving average (DMA) crossed under the 100-DMA on January 5, a bearish signal that propelled the white metal from $23.25 down to $22.00, a $1.00 fall.

On the downside, XAG/USD’s first support would be the January 7 daily low at $21.96. A breach of the latter exposes October 20, 2021, a daily low at $21.83, followed by December 15, 2021, a cycle low at $21.43.