- Silver sees only a modest rebound from its lowest level since mid-February below $23.00 after weak US GDP data.
- As US yields rise and the USD remains resilient, XAG/USD remains at risk of falling to previous 2022 lows at $22.00.
The prices of the silver (XAG/USD) have only experienced a modest rebound from its lowest level since mid-February below $23.00 in the wake of data showing a surprising drop in US GDP in the first quarter, with the US dollar having pulled back from highs. But any more significant bounce doesn’t seem ready, with XAG/USD for now still trading just above the $23.00 level, down around -0.80% on the day.
The US dollar has been on a rally in recent days with the US dollar index DXY hitting five-year highs above 103.00 this week and near 104.00 earlier this Thursday amid concerns about geopolitics, global growth and expectations of aggressive Fed tightening. This has weighed heavily on the precious metals complex, with both silver and gold taking a hit.
Indeed, at current levels around $23.00, XAG/USD trades down for the week by nearly 5% and trades nearly 12% below last week’s highs above 26.00$. Some analysts might interpret the latest US GDP figures as lessening the likelihood that the Fed will continue its aggressive path in its guidance on interest rates in the coming months.
But for now, the markets don’t seem to be reading it that way. US yields continue to rise and the dollar is likely to hold firm, perhaps given the latest inflation readings for the fourth quarter. The XAG/USD remains vulnerable to retest yearly lows around $22.00 and return to Q4 2021 lows at $21.50.
Silver technical levels
Source: Fx Street
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