Silver (XAG/USD) experienced a sharp decline of over 2% on Wednesday, trading at $73.46 after reaching a recent peak near $75.30. This drop comes amid heightened speculation that renewed hostilities between the US and Iran, following an overnight exchange of fire, could prompt major central banks to consider interest rate hikes. Such a move is generally seen as a headwind for non-yielding assets like silver [1].
Technically, silver remains range-bound between $73.00 and $78.50, with the latest price action reflecting bearish momentum. The metal recently hit a four-week low of $71.79 on May 28. The 50-day Simple Moving Average (SMA) at $76.14 serves as the first resistance level, while the 200-day SMA at $67.47 provides a key support below the current range. The Relative Strength Index (RSI) indicates that sellers are dominating, with the index trending toward oversold territory [1].
For a bullish reversal, silver would need to break above the 50-day SMA and the May 26 high of $78.52, before targeting the 100-day SMA at $81.03. On the downside, immediate support lies at $73.00, followed by the May 28 low at $71.79. The article notes that silver's price is influenced by factors such as geopolitical instability, central bank rate decisions, and the strength of the US dollar, with the current environment favoring sellers due to rising rate hike expectations [1].
CONCLUSION
Silver's price has come under pressure due to renewed geopolitical tensions and increased speculation of central bank rate hikes, leading to a more than 2% decline. Technical indicators suggest bearish momentum, with sellers currently in control. The market is closely watching support and resistance levels for further direction.