Silver (XAG/USD) price is bouncing after a huge sell-off in June 2023. The gold price has also been consolidating for the past few days. The latest analysis suggests the ongoing bounce has the potential to become a proper bullish reversal if the price reclaims a key level.
On Tuesday, Silver price per ounce turned green once again after rising 1.55% on Monday. At press time, the price of the precious metal was up 0.58% during its London session. Silver outperformed Gold price today, which was up only 0.07% till press time.
XAG/USD Plunged On Hawkish Fed Comments
This month’s FOMC meeting resulted in a pause in rate hikes. However, the US Federal Reserve also vowed to increase rates further later this year in order to tame inflation. While the inflation has significantly decreased in the past few months, it is still well above the Fed’s target of 2%.
The probability of the more rate hikes later this year is the primary reason behind the ongoing downtrend in Silver price. However, the indicators are pointing towards at least a short term bounce very soon as the DXY index keeps showing weakness.
Silver Price Prediciton Amid More Rate Hikes
The technical analysis of XAG/USD chart reveals that the price got support from the trednline that connected the January high to the May low. This region also perfectly aligns with the 0.618 Fib retracement level as shown on the following chart.
Due to the bullish divergence on the RSI, Silver price prediction is not looking very bearish. I expect a relief bounce very soon. For a proper bullish reversal, XAG/USD needs to break above $24.50 resistance on a weekly timeframe.
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