Silver Price Forecast (17 May, 2023): Silver price (XAG/USD) is trading slightly higher around $23.75-80 after bouncing back from a 1.5-month low of $23.50 on Tuesday. The precious metal suffered its biggest daily loss in a week as the US dollar strengthened and investors turned cautious ahead of the Fed meeting.
However, the recovery in silver is likely to be short-lived as the technical outlook remains bearish. The silver price has broken below the 50-day moving average (DMA) for the first time since August, signaling a possible downtrend. Moreover, the MACD indicator is in negative territory, suggesting a lack of momentum.
Therefore, silver could resume its slide and test the next support level at the 100-DMA near $23.40. This level coincides with the 50% Fibonacci retracement of the March-May rally. A break below this level could open the door for further losses towards the $23.00 psychological mark.
On the flip side, if silver manages to reclaim the 50-DMA around $24.10, it could face resistance at a horizontal zone that has acted as a pivot point since late March, around $24.20. Above that, another hurdle awaits at $24.50-55, where multiple highs and lows were formed during April-May.
In conclusion, silver is under pressure after breaking below the 50-DMA and could extend its decline towards the 100-DMA and $23.00 unless it recovers above $24.10.
