Silver (XAG/USD) price per ounce is surging despite a pullback in Gold price. The precious metal has rebounded strongly from its monthly lows. The price is currently 18.5% up within the past three weeks. This also means that Silver has outperformed Gold during this month which has surged only 8.65% during this time.
On Thursday, precious metals are surging once again, adding to their weekly gains. XAG/USD pair outperformed Gold once again as the price was 1.07% up at the start of the London session. This translates into a more than 3% price increase within this week.
Historically, the Silver price chart has shown a strong inverse correlation to DXY Index. It has been seen that a weakness in the greenback usually results in a positive price action by Silver. Since multiple bank failures occurred at the start of this month, the dollar strength index is 3.18% down.
The falling DXY Index and the prevailing risk-off approach in the midst of bank runs have created a strong demand for a store of values like Gold and Silver. Furthermore, due to the increase in the default risk for the banks, many analysts are predicting that the era of rate hikes might already be over.
As clear from the following XAG/USD chart, the pair started had a massive pullback in February, which has been mostly reversed in this month. The chart also shows that the next major resistance lies at $24.6, which is also the YTD high for Silver. I expect a pullback from this level before moving up further.
Silver price prediction will flip extremely bullish if the price gains strength above $24.6 level. This might result in a much bigger upside move with the $30 psychological level within the bulls’ reach. This might turn out to be an epic rally if the US Federal Reserve pivots and starts to decrease rates this year.
This post was last modified on %s = human-readable time difference 10:23