Silver Price Analysis: XAG/USD remains capped below $23.00 area

Silver prices have found support at $21.40 earlier on Wednesday to pare earlier losses and return to the upper range of $22.00. The pair, however, has lost steam again, right below $23.00.

Precious metals depreciate as the US dollar firms up

Silver and other precious metals have been trading lower amid a risk-averse sentiment on Wednesday. Investors' fears about surging inflationary pressures have boosted the US dollar across the board on safe-haven flows amid higher US T-Bond yields.

The increase in oil prices, with the WTI reaching fresh seven-year highs at $79.80 has triggered concerns about the possibility that inflation might pose a challenge to the post-pandemic recovery and add pressure to the Federal Reserve to accelerate its plan to normalize monetary policy.

XAG/USD: likely to extend beyond $23.00while above $21.87/17 – Commerzbank

From a technical perspective, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, observes further upward potential on the precious metal: “Silver has sold off to test its long-term pivotal support at $21.87/17, which have so far held. These represent the September and November 2020 lows and also July 2014 high and 2016 high. These are considered to be a major band of support and we expect them to act as a floor for the market.”

Technical levels to watch