Silver Price Prediction: XAG/USD Tumbles As DXY Surges
Silver (XAG/USD) price has experienced a very sharp correction in May. The price of the precious metal has faced an intense rejection from the $25.4-$26.8 resistance level. Silver price per ounce is currently in the midst of a recovery after closing the last two weeks with a 11.3% loss.
The XAG USD pair turned red on Monday after a 2.58% bounce on Friday. At press time, Silver is trading at $23.21 as the precious metal was down 0.38% at the start of its New York session. The DXY index traded sideways and showed minor gains for the day.
XAG/USD Underperforms XAU/USD
The XAG/USD pair has dropped much more than the XAU/USD in the past few weeks. While Gold price is currently trading 6.43% from its yearly highs, Silver is down 11.3%. There are multiple factors behind this drop in Silver price per ounce, but the biggest of them all is the slower-than-expected recovery in China.
A strong bounce in the DXY index further intensified this selling pressure. The next month’s FOMC meeting will play a key role for commodity prices. The dollar strength index is currently trading at its highest level since March 17.
Silver Price Attempts Key Breakout
Technical analysis reveals that XAG/USD is currently attempting to breakout of the trendline after falling below it a couple of weeks ago. The price briefly dipped below 0.5 fib retracement level but bounced last week. This level currently sits at $23.04, which is 3.3% below the current price. The daily RSI appears to be oversold but it can still go lower.
My Silver price prediciton of $23.04 has already been perfectly met. If the price breaks out of the trendline, I expect a strong relief rally. The DXY index and the FOMC decision will keep the price in check in the coming weeks.
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