Silver price (XAG/USD) has behaved precisely as I mentioned in my last forecast. The price retraced from the $26 level after a failed breakout attempt and retested the $24.65 resistance. The demand at this level has resulted in another bounce, and the XAG/USD pair is now trading at $25.
The bounce in the Silver price per ounce is not surprising as the demand for safe havens is increasing in the midst of a developing banking crisis. A regional lender in the US, First Republic Bank is in hot waters as its deposits fell by 40% in Q1 2023. This has reignited banking concerns among investors who were already taking a cautious approach.
Due to the weakening US Dollar and the drop in the DXY index, precious metals are experiencing an increase in demand. Consequently, Gold and Silver have been performing very well for the past few weeks. Another reason behind the ongoing rally is the ongoing banking crisis in the US which is a deep concern for investors.
The upcoming FOMC meeting will be very crucial for silver price, as another rate hike can increase the selling pressure. However, there is also a possibility of a much-anticipated pause in rate hikes. This will be very bullish for the commodities and equities which have experienced a deep correction in the past 12 months.
Technical analysis of the XAG/USD chart on a weekly timeframe removes the noise and presents a clear picture. As mentioned in my previous update, the price got rejected from the major sell zone marked on the following chart. A reclaim of this zone can make Silver price prediction very bullish. The upcoming FOMC meeting will keep the price in check till next week.
Noticing a very steep hike on the Silver price chart, a bigger pullback is still on the cards. However, such a pullback can be considered a good buying opportunity as long as the price doesn’t get acceptance below the $24.5 level.
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This post was last modified on Apr 27, 2023, 12:17 BST 12:17