XAG/USD tumbles mid-$23.00 amid heavy commodity sell-off

  • Silver fell towards $23.50 on Monday amid a sell-off in risk assets and commodities and as the USD strengthens.
  • Now that XAG/USD is below its 200DMA, the bears are eyeing a possible drop towards the 4Q 2021 lows in the $21.00s.

Silver spot prices (XAG/USD) came under heavy selling pressure on Monday, alongside a broader decline in market appetite for risk and declines in other key commodities such as energy and metals. Traders cited risk aversion linked to the heightened risk of a lockdown in China with a Covid-19 outbreak now reported in Beijing, lingering pessimism about the prospects for a peace deal in the Russian-Ukrainian war and, perhaps – being most important, recent hawkish chatter from central bank policymakers.

Either way, XAG/USD was last trading nearly 2.5% lower on the day just above the $23.50 per troy ounce mark, after breaking through key resistance. in the form of the 200-day moving average at $23.85 and the March lows at $23.97. This means spot silver prices are trading at their lowest since mid-February before the start of the Russian invasion of Ukraine, with global yields down slightly on that day due to risk aversion, probably the only thing keeping silver from crashing further towards $23.00.

But bears will be confident following the recent break below the 200DMA, with many calling for a drop to support in the form of 4Q 2021 lows in the $21.00s in the coming weeks as the US Dollar continues. to climb on the hawkish Fed. sentiment and risk aversion flows. Key risk events for traders to watch this week include the first estimate of US Q1 GDP growth on Thursday, followed by March Core PCE inflation on Friday, with the latter likely to endorse the Fed’s plans. / market expectations for a 50 basis point rate hike next week. Meet.

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