- Summary:
- Silver price has formed a symmetrical wedge pattern . An upward breakout can take the price to $30 in 2023.
Silver (XAG-USD) price started 2023 with a significant correction. Since the start of the year Gold (XAU-USD) price has also been in a downtrend. Silver price per ounce has depreciated by 11% in its value within the past few weeks. A significant reason behind the correction in precious metals is the strength of the DXY index.
After tagging the lows of 100.82, the DXY chart has experienced a strong rebound. The dollar strength index has soared by 3.7% since the start of February 2023. Analysts are producing this price action to the recent rate hike of 25 basis points and the January CPI data.
Why Is XAG/USD Dropping?
As per the Silver news today, Goldman Sachs has revised its interest-rate forecast for 2023. According to the investment giant, it expects the US Federal Reserve to hike interest rates another 3 times. This would mean another 75 basis points from the current level and a terminal rate of 5.25-5.5%.
It would be very difficult for precious metals to thrive in a high-interest rates environment. The recent rally in Gold and Silver was due to an expected pause in rate hikes. However, in light of the recent developments, a pause is unlikely to occur till the 2nd half of 2023. If DXY keeps gaining strength, then XAG/USD could flip really bearish.
Silver Price Prediction & Daily Chart Analysis
Technical analysis of the Silver price chart reveals very important information. After a sideways price action during the holiday season, XAU/USD price got rejected from the downward trendline. Consequently, the price tanked by 11% in the following weeks and now trading at $21.19.
The price action has also formed a symmetrical wedge pattern which shows the indecision. The silver market has been in a sideways accumulation for the past few years. Nevertheless, the price is still trading above the 200-day moving average as well as the 200-week moving average.
If bulls could orchestrate a breakout in the upwards direction, then I expect Silver to surge to $30 level in 2023.
