Silver Price Forecast: Is it Safe to Buy XAG/USD Now?

Summary:
• Silver price downward momentum continued after the strong American consumer confidence data. It crashed to a low of $18.20

Silver price downward momentum continued after the strong American consumer confidence data. It crashed to a low of $18.20, which was the lowest level since September 7 of this year. Silver has crashed by more than 8% from its highest level this month and by 20% year-to-date. It has fallen by over 32% from the year-to-date high of $26.

Silver faces a dual-challenge

Silver price has fallen in the past few months as the metal continues to face two key challenges. First, the Fed has become increasingly hawkish in the past few months. It has hiked interest rates by over 300 basis points this year and hinted that the situation will continue. 

Analysts are now expect that the Fed will hike interest rates by 75 basis points in November and December. For one, the latest data by the Conference Board showed that the country’s consumer confidence continued rising this month. As a result, the US dollar index (DXY) has surged to the highest level in more than 20 years.

Silver price has also crashed because of the struggling industrial sector, especially in China. Data published by the World Bank and OECD warned that China will have its slowest year on record. The country’s industrial and manufacturing production has slipped due to lockdowns and the collapse of the property market. 

Silver is usually affected by China’s economic performance since it is the biggest buyer in the world. As such, slow growth in the country usually leads to weak demand.

Silver price prediction

The daily chart shows that silver price has been in a strong bearish trend in the past few months. This performance saw the metal crash below the important support level at $21.45, which was the lowest level in September 2021. It has crashed below the 25-day and 50-day moving averages. In this period, the awesome oscillator has fallen below the neutral level.

Therefore, the XAG/USD pair will likely continue falling in the coming days as the two challenges remain. A drop below the support at $17.56 will signal that bears are still in control and will lead to a possibility of the metal falling to $15. The stop-loss of this trade is at $20.