- Silver extends the pullback to lows since late January.
- Negative tone in the markets and the rise of the dollar complicate the scenario for silver.
Following Tuesday’s rebound, the XAG / USD pair lost traction on Wednesday and fell more than 2%. With the dollar retaining its strength, silver extended its decline and hit its lowest level since late January at $ 25.62. Then it bounced but without getting back $ 26.00, it is trading at $ 25.90, yielding 0.75%.
Risk aversion, along with the rise in the dollar and the advance in Treasury yields are negative factors for silver. In this regard Powell’s words, the Fed chairman later on Thursday may be important, if it has an impact on the bond market.
On the four hour chart, XAG / USD continues to trade below the one-week downtrend line. On the same chart, the Relative Strength Index (RSI) indicator is hovering near 30, suggesting that the metal could make a technical correction before the next leg down.
However, unless the pair manages to break above the trend line, which is currently around $ 26.40, and recovers the $ 26.80 – $ 27.20 area (100 and 200 moving averages), it is likely that the bearish bias remains intact.
On the downside, initial support is at $ 25.60 (multi-week lows) and if a close below that level occurs, XAG / USD could continue to push down to $ 25 (psychological level, static support).
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
