Silver Price Forecast: XAG/USD under pressure ahead of the Fed, tumbles to 23.00

Metals drop sharply so far on Wednesday, ahead of the FOMC statement.
US dollar gains momentum, rises modestly following better-than-expected US data.
XAG/USD extends weekly losses, finds support at $23.00.

Matías Salord FXStreet

Silver and gold are falling sharply on Wednesday before the FOMC statement. XAG/USD is now off lows, hovering around $23.25, down 1.20% for the day. Earlier, it tumbled to $23.00, reaching the lowest level since October 18.

The sharp decline represents an extension of the slide that started from levels near $25.00 last week. It has accelerated over the last two days, when it dropped from $24.05.

The US dollar gained some momentum following US economic data but it still remains mixed for the day across the board as market participants await the outcome of the FOMC meeting. The Federal Reserve is expected to announce a taper to its purchase program. The tone and the words of Jerome Powell are likely to trigger volatility, including metals.

The ADP reports showed private payrolls increased by 571K in October, above the 400K expected, while the ISM service sector rose to a record high level of 66.7 in October. The data boosted US yields and added support to the dollar. Still, the FOMC meeting will be the key driver, at least until Friday’s NFP.

A daily close for XAG/USD under $22.70 would point to a renewed weakness while a recovery back above $24.00 should clear the way again for a test of $25.00.

Technical levels

XAG/USD

Overview
Today last price	23.12
Today Daily Change	-0.42
Today Daily Change %	-1.78
Today daily open	23.54

Trends
Daily SMA20	23.55
Daily SMA50	23.39
Daily SMA100	24.29
Daily SMA200	25.45

Levels
Previous Daily High	24.07
Previous Daily Low	23.39
Previous Weekly High	24.62
Previous Weekly Low	23.66
Previous Monthly High	24.83
Previous Monthly Low	22
Daily Fibonacci 38.2%	23.65
Daily Fibonacci 61.8%	23.81
Daily Pivot Point S1	23.26
Daily Pivot Point S2	22.99
Daily Pivot Point S3	22.59
Daily Pivot Point R1	23.94
Daily Pivot Point R2	24.34
Daily Pivot Point R3	24.61

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD trims gains, reclaims 1.1600 and beyond

Following an earlier drop to yearly lows around 1.1530, EUR/USD now manages to recoup part of the ground lost and reclaim the area above 1.1600 the figure in the latter part of the NA session on Tuesday. Meanwhile, the pair’s marked retracement comes in response to the unabate march norht in the US Dollar, always propped up by the intense flight-to-safety environment amid the deteriorating geopolitical landscape in the Middle East.

GBP/USD attacks 1.3300, refreshing three-month lows

GBP/USD is deep in the red near 1.3300, accelerating its downside to renew three-month lows in European trading on Tuesday. The ongoing escalation in the Iran war, combined with rising Oil prices, weighs negatively on the higher-yielding Pound Sterling as the US Dollar capitalizes on increased haven demand.

Gold bounces off lows, back above $5,100

Gold remains on the defensive, eroding part of the recent multi-day advance and managing to trade back above the $5,100 mark per troy ounce on Tuesday. The precious metal initially dropped just below the critical $5,000 threshold on the back of the persistent strength of the Greenback, higher US Treasury yields across the curve and investors' repricing of Fed rate cuts.