- Silver prices are plunging to their lowest level since the start of the year at $ 21.50.
- XAG / USD plunges due to the strength of the US dollar and its mood for risk.
- Confirmation less than $ 21.65 could send XAG / USD to test $ 20.00.
Silver prices accelerated their downtrend on Wednesday, breaking through recent lows in the $ 22.00 area and extending beyond the September 2020 lows at $ 21.65 to hit $ 21.50 through now the cheapest price since July of last year.
Strong US dollar and better risk appetite crush metals prices
The strong rally in the dollar, with the US dollar index hitting YTD prices above 94.00 due to higher US bond yields amid the outlook for future bond purchases by the Federal Reserve, harms dollar denominated metals.
Beyond that, improving market sentiment, with major stock markets in Europe and the United States posting a strong rebound from Tuesday’s sell-off and bullish data on U.S. home sales increased. the selling pressure for silver and other precious metals.
XAG / USD: attempt to confirm breach of $ 21.65 low
The daily chart shows silver spot prices struggling with the September 2020 lows at $ 21.65. If the pair manages to extend lower, the next support level could be at $ 21.00, the 50% retracement of the March-August 2020 rally, and then possibly the psychological level of $ 20.00.
On the upside, the pair is expected to break above the September 22-24 lows at $ 22.00 / 10 to attempt another attack until the September 21 high at $ 23.00, where the retracement level 32.2% Fib may also offer some resistance ahead of the September 16 high at $ 23.95.