Silver Price Forecast: XAG/USD tumbles below $21.60 as USD Index recovers amid geopolitical tensions

Silver price has slipped below $21.60 as the dismal market mood has improved the safe-haven’s appeal.
S&P500 futures have extended their losses further amid the renewal of US inflation fears.
The preliminary annualized GDP for the fourth quarter is expected to remain steady at 2.9%.

Sagar Dua FXStreet

Silver price (XAG/USD) has delivered a vertical fall to near $21.55 in the Tokyo session. The white metal tumbled like a house of cards as the escalating geopolitical tensions strengthened the risk aversion theme. Silver price is expected to continue its downside momentum as the fears of a recovery in the United States inflation have joined the US-China tensions.

The US Dollar Index (DXY) has rebounded firmly to near 103.70 as the geopolitical tensions-inspired volatility has forced investors to hide behind safe-haven assets. Warning signals from US Ambassador to China if it decides to provide lethal military aid to Russia for its invasion of Ukraine has dampened the market mood. Also, three projectiles from North Korea on Japan’s Exclusive Economic Zone (EEZ) have added fuel to the fire.

S&P500 futures have extended their losses further as the renewal of US inflation fears has raised red flags for economic recovery ahead. The Federal Reserve (Fed) might continue hiking interest rates after a rebound in the prices of goods and services at the factory gates and a revival in consumer spending, conveyed by upbeat Retail Sales data. Investors should be aware that the US markets will remain closed on Monday on account of Presidents’ Day.

For further guidance, investors will focus on the Gross Domestic Product (GDP) data, which is scheduled for Thursday. The preliminary annualized GDP for the fourth quarter is expected to remain steady at 2.9%.

Silver technical analysis

Silver price is demonstrating an extended correction after a breakout of the Falling Channel chart pattern placed on an hourly scale. The asset is required to rebound above the chart pattern to negate the downside bias.

The 20-period Exponential Moving Average (EMA) at $21.57 is providing support to the Silver asset.

Meanwhile, the Relative Strength Index (RSI) (14) has failed to sustain in the bullish range of 60.00-80.00. A bullish momentum will be triggered if the momentum oscillator manages to reclaim the 60.00-80.00 range.

Silver price hourly chart

XAG/USD

Overview
Today last price	21.59
Today Daily Change	-0.17
Today Daily Change %	-0.78
Today daily open	21.76

Trends
Daily SMA20	22.76
Daily SMA50	23.34
Daily SMA100	21.98
Daily SMA200	21.02

Levels
Previous Daily High	21.81
Previous Daily Low	21.18
Previous Weekly High	22.08
Previous Weekly Low	21.18
Previous Monthly High	24.55
Previous Monthly Low	22.76
Daily Fibonacci 38.2%	21.57
Daily Fibonacci 61.8%	21.42
Daily Pivot Point S1	21.36
Daily Pivot Point S2	20.96
Daily Pivot Point S3	20.73
Daily Pivot Point R1	21.99
Daily Pivot Point R2	22.21
Daily Pivot Point R3	22.62

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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