Silver Price Forecast: XAG/USD surge as investors seek safety amidst risk-off sentiment

Silver price rises sharply late in the New York session, up 0.34% due to overall US Dollar (USD) weakness, amidst a risk-off impulse in the financial markets. Investors seeking safety moved funds toward the precious metals segment. At the time of typing, the XAG/USD is trading at $23.30 after hitting a low of $22.83.

XAG/USD underpinned by sentiment and a weaker US Dollar

Wall Street’s shifted gears as it approaches Tuesday’s close. Even though sentiment changed after First Citizens BancShares acquired Silicon Valley Bank (SVB), traders expect another rate hike by the US Federal Reserve (Fed) in the summer. Reflection of that is US T-bond yields are climbing, with 2s above the 4% threshold.

Data-wise, the US economic docket featured the Conference Board (CB) Consumer Confidence for March, which rose to 104.2 from 103.4 in February. “Driven by an uptick in expectations, consumer confidence improved somewhat in March but remains below the average level seen in 2022,” said Ataman Ozyildirim, senior director of economics at the Conference Board.

Early data revealed that before Wall Street opened, the House Price Index climbed 0.2% MoM in January vs. a fall of 0.6% estimated, data from the US Federal Housing Finance Agency showed on Tuesday. At the same time, the S&P/Case-Shiller Home Price Index arrived at 2.5% YoY in January, down from 4.6% in the prior month.

In the meantime, the US Dollar Index, which tracks the buck’s value vs. six currencies, extended its losses for two straight days, falling to three-day lows at 102.407, down 0.42%.

XAG/USD Technical analysis

Silver’s daily chart suggests the XAG/USD is neutral to upward biased, with the 20-day Exponential Moving Average (EMA) crossing above the 50-day EMA. At bullish territory, the Relative Strength Index (RSI) resumed its upward trajectory, while the Rate of Change (RoC) is neutral. That said, mixed signals warrant caution. For XAG/USD to test the YTD highs, th white metal needs to reclaim $23.52. Once done, XAG/USD could rally toward the $24.00 figure before testing the YTD high at $24.63.