Silver Price Forecast: XAGUSD trips down to lowest level in two years, clings around $19.20s
- Silver prices plunged more than 3.76% on Tuesday as the greenback rose to a new twenty-year high.
- Recession fears and high inflation re-ignited nervousness around the financial markets.
- Silver Price Forecast (XAGUSD): The break below the 200-week SMA paved the way for a fall towards June’s 2020 lows just below $17.00.
Silver (XAGUSD) plummets as the New York session winds down after a risk-off impulse spurred safe-haven flows toward the greenback, which is having its best single-trading gain since March 19, 2020, when it rallied 2%. At $19.27, XAGUSD is trading just $0.10 above the YTD low, down 3.76%.
The market sentiment is mixed, as US equities pared earlier losses late in the North American session. Slower growth in the Euro area, alongside the deceleration of the US economy, stoked recession fears worldwide. Additionally, soaring energy prices in the EU and Russia threatening to halt natural gas flows to Europe kept investors nervous, who shifted toward safe-haven assets as a reaction to that.
During the Asian session, newswires reported that US President Joe Biden might roll back some tariffs imposed on Chines imports as they struggle to help alleviate inflation/recession worries.
In the meantime, the US Dollar Index is up by 1.28%, at 160.507. Contrarily, the US 10-year Treasury yield plunged eleven basis points, finishing the New York session at 2.818%.
During the US session, May’s Factory Orders rose by 1.6% MoM, more than the 0.5% expected. In the same report, orders excluding Transports jumped by 1.7%.
Later in the week, the US economic docket will feature FOMC meeting minutes alongside ISM Non-Manufacturing Indices, and some Fed speakers will cross the wires.
Silver Price Forecast (XAGUSD): Technical outlook
The XAGUSD’s weekly chart illustrates the pair as bearish biased. The last week’s silver price broke below the 200-week simple moving average (SMA), exposing the white metal to further selling pressure. Also, oscillators are still in negative territory but with some room to spare before entering the oversold area.
Therefore, XAGUSD’s first support would be $19.00. Break below will expose $18.94, followed by June’s 2020 lows around $16.95.
XAGUSD Key Technical Levels