• Silver picks up bids to reverse the previous day’s pullback from eight-month high.
• Ukraine-Russia headlines propel rush to risk-safety, EU’s resistance in banning Russian oil imports triggered earlier pullback.
• Wall Street closed in the red, yields rebound while the US dollar remains firmer.
• Further upside can’t be ruled out as geopolitics fan inflation fears.

Although a pullback from multi-day top probed silver (XAG/USD) buyers the previous day, the bright metal begins Tuesday’s Asian session trading on a front foot around $25.60 as geopolitical fears from Ukraine extend the risk-aversion wave.

Silver prices rose to the highest since July 2021 the previous day as risks to the global supply chain emanating from Ukraine-Russia tussles escalated as the US intends to go ahead with banning Moscow’s oil. However, a lack of support from the European Union (EU) and the bloc’s emphasis on other means to punish Moscow for its invasion of Ukraine seems to have triggered the profit-booking mood afterward.

On the same line was a halt in Russian fire in selected Ukrainian cities, as well as a restart of the human corridor after a two-day break.

Even so, “Ukrainian officials said a Russian airstrike hit a bread factory in northern Ukraine on Monday, killing at least 13 civilians, while talks between Kyiv and Moscow made little progress towards easing the conflict,” said Reuters.

It’s worth noting that the US Treasury yields recovered from a two-month low while the Wall Street benchmarks closed in the red and the US Dollar Index (DXY) also cheered the risk-off mood.

As inflation fears push global central banks towards faster rate hikes, the traditional safe-havens are likely to remain in the demand. That said, the XAG/USD bulls may keep their eyes on this week’s US Consumer Price Index (CPI) data amid indecision over the Fed’s 0.50% rate-hike, even as a 0.25% uplift is almost given.

Technical analysis

Unless trading beyond the November 2021 tops surrounding $25.40, XAG/USD remains capable of challenging the 61.8% Fibonacci retracement of the May-September 2021 downside, near $26.00.