- XAG/USD continues to trade with a bearish bias and hit an over two-month low at $23.20 on Wednesday.
- The dollar continues to advance, weighing on the pair, amid risky flows, geopolitical worries and Fed tightening bets.
Continued strength in the dollar amid still nervous global market risk appetite (US equities pared earlier gains to trade flat again and remain near weekly lows) kept spot prices silver (XAG/USD) with a negative bias. XAG/USD continues to struggle to bounce back towards its 200-day moving average at $23.83 per troy ounce, with the precious metal printing a fresh over two-month low at $23.20 on Wednesday.
Upcoming data on US GDP and Core PCE inflation on Thursday and Friday will likely support expectations that the Fed will raise interest rates by 50 basis points next week and at its upcoming meetings, which should, alongside geopolitical developments in Europe, keep the USD well supported in the coming days. If equities resume their recent decline, which seems more likely than not at this point, falling US (and global) yields on demand for safe-haven bonds could slow the pace of any decline in XAG/USD, but the Bears will still consider a test of $23.00.
Looking a little longer term, the bears will target testing the yearly lows in the $22.00 area, with recent failures to get back above the 200DMA and resistance at $24.00 a bearish sign for XAG/ USD, according to the technicians. But technicians also warned that the recent buildup of long positions in the dollar is becoming excessive. A period of likely means a break below $23.00 is not on the cards until the end of this month.