Silver (XAG/USD) price has been surging for the past few weeks. The correction in March 2023 has led to a massive rebound, as the precious metal is 25% up from the lows. This also means a new YTD high for Silver price per ounce and the highest level since April 2022.
XAG/USD is having a great week. After a 0.61% drop on Monday, it is currently trading 3.6% up from the week’s opening. The major surge occurred on Tuesday as the pair gained 4.43% in one day. On Thursday, the Silver price remains in consolidation and is trading at $24.9 at press time.
Silver & Gold Rally As DXY Slides
The DXY Index tracks the strength of the US dollar against six major global currencies. Since March 2023, the index has been in a tailspin. This has resulted in a 3.6% drop from its YTD high and indicates weakness in the US dollar. The fall in DXY Index has led to a rally in global speculative assets like commodities and equities.
The following DXY Index chart shows that after a steep fall in the past few weeks, it is now retesting support. This can cause a bounce in the dollar strength index in the coming days and a pullback in the Silver price per ounce. However, a break below 101.33 may cause a bigger rally in precious metals.
Silver Price Likely To Correct Before Major Up Move
The XAG/USD chart shows that the ongoing price rally appears to be overextended. This means that a pullback can be around the corner. Currently, the price is trading above a key resistance of $24.65, but it needs to close the week above this level to show strength. This level was also mentioned in our last week’s analysis. Rejection from this level may result in a pullback below $24.
However, despite a chance of a correction, my long-term Silver price prediction still remains bullish due to the weakness in the dollar. If the US Federal Reserve announces a pause in rate hikes during its next meeting, then I expect Gold and Silver to make new yearly highs.
