Silver (XAG/USD) price appears to show some recovery after a brief pullback in the Dollar Strength Index. The precious metal is currently sitting 2.07% above last week’s low of $22.16. On Monday, silver is priced at $23.07, up 0.39% till press time.
The rebound in the prices of metals like gold and silver can be attributed to the weakness in the dollar. The DXY appears to be facing headwinds on Monday as expectations grow for a pause in rate hikes by the FED. The Dollar Strength Index currently sits at $105.2, down 0.1% till press time.
Investors Await FOMC Decision
On Wednesday, The Federal Reserve will announce its next move regarding interest rates in the US. The majority of the investors expect the interest rates to remain unchanged, but the investors will look for signs of a rate hike in the coming months. The Bank of England and the Bank of Japan will also present their policy decisions this week.
Some analysts are of the opinion that further interest rate hikes are still on the cards. They outline the high inflation and the resilient US economy as the reasons that would likely force the Fed for more rate hikes. Silver price currently stands 11.3% below its yearly high.
Silver Price Forecast
The chart for XAG/USD shows that the price rebounded after briefly dipping below the downward trendline. The price now sits 4% above the key support level of $22.175. The chart also shows the price making its way to retest the 200 MA, which lies at $23.467.
The Silver price prediction will turn bearish if the price faces strong resistance at the 200 MA level. In this case, the bears can target the $22 support level. However, if the price finds strength and breaks through the $23.467, a retest of the August highs around $24.6 will be on the cards.
I predicted this bounce in precious metal prices in my last Silver price forecast. I also regularly update the price targets on my Twitter, where you are welcome to follow me.
