As mentioned in our last Silver price (XAG/USD) prediction, the pair is consolidating above its yearly highs. This also means a price action above the resistance, which is a sign of strength. In the past few days, Silver price per ounce has outperformed Gold. While XAU/USD is currently 2.08% down from its yearly highs, XAG/USD is down only 0.68%.
On Monday, the precious metals are showing a negative price action. During the London session, Silver is trading at 24.92 after showing minor losses. Gold is also showing a similar price action despite weakness in DXY Index.
The CPI data for March 2023 will be released on Wednesday, April 12. Due to the speculation on the inflation data, I expect commodities and equities to remain volatile this week. While many investors await the CPI data to take a clear direction, short-term traders can still ride the volatility swings.
A significant decrease in inflation will be very positive for the silver price, as this could mean a pause in more rate hikes. On the other hand, sticky inflation data might lead to another rate hike in the next FOMC meeting. The CPI data will be very critical for the dollar strength (DXY) index as well, which has been in a downtrend for the past few weeks.
The following XAG/USD chart shows the major levels of support and resistance. It can also be seen on the chart that the ongoing price rally has occurred without any pullback. For a healthy rally, the price needs to absorb some selling pressure before targeting further upside. Therefore, in the coming days, I expect Silver and Gold prices to have a pullback.
However, considering the current state of the chart, my Silver price prediction for this year remains bullish. Any upcoming pullbacks might be good buying opportunities if the price holds its 200-day moving average, which lies at $21.11.
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This post was last modified on Apr 10, 2023, 11:23 BST 11:23