Silver Price Forecast: XAG/USD falls to near $33.50 amid improved market sentiment

• Silver price attracts sellers as recent US data reinforces the odds of nominal rate cuts by the Fed.
• The US Dollar receives support as Treasury yields continue to gain ground.
• The downside of the Silver could be restrained due to political uncertainty around the US presidential election.

Silver price (XAG/USD) is under pressure as the US Dollar (USD) and Treasury yields continue to rally, driven by recent robust US economic data released on Friday. Silver price hovers around $33.50 per troy ounce during Monday’s European trading hours.

The dollar-denominated Silver faces challenges due to solid US Dollar (USD) amid higher Treasury yields. A higher US Dollar makes Silver expensive for buyers with foreign currency. The US Dollar Index (DXY), which measures the USD against six major currencies, trading near 104.30. Meanwhile, yields on 2-year and 10-year US Treasury bonds are at 4.12% and 4.28%, respectively.

Friday's data release showed the US Michigan Consumer Sentiment Index rose to 70.5 in October from 68.9, beating forecasts of 69.0. Additionally, Durable Goods Orders declined by 0.8% month-over-month in September, a smaller drop than the expected 1.0%.

Political uncertainty around the US presidential election may lend some support to Silver. In the past three weeks, allies of former President Donald Trump faced at least 10 legal setbacks in key battleground states, which could influence the November 5 race between Trump and his Democratic opponent, Vice President Kamala Harris.

The safe-haven appeal of Silver may be limited, however, by easing geopolitical tensions. Following Israel's airstrikes on Iranian missile and air defense sites early Saturday, which were less aggressive than expected, Iran has downplayed the impact. Supreme Leader Ayatollah Ali Khamenei remarked that the incident "should neither be downplayed nor exaggerated."