Silver Price Forecast: XAG/USD slumps below $73.00 under 100-day EMA as downside pressure persists

Silver price ( XAG/USD) tumbles to near $72.85 during the Asian trading hours on Tuesday. The white metal remains under selling pressure amid intensifying tensions in the Middle East. Reports of Iranian attacks on vessels in the Strait of Hormuz boost crude oil prices, fueling inflation fears. 

This has led to expectations that the US Federal Reserve (Fed) may keep interest rates elevated for longer, making non-yielding assets like silver less attractive. Minneapolis Fed President Neel Kashkari said on Sunday that further rate hikes cannot be ruled out, particularly as inflation risks remain elevated due to rising energy prices linked to the Iran conflict.

Technical Analysis:

In the daily chart, XAG/USD keeps a bearish near-term bias as spot holds below the 100-day Exponential Moving Average (EMA) and the Bollinger Bands 20-day simple moving average (SMA). The Relative Strength Index (14) around 44 shows subdued bearish momentum rather than capitulation, suggesting downside pressure persists but without an oversold signal that would hint at an imminent, strong rebound.

On the topside, initial resistance is located at the 100-day EMA at $74.45, followed by the Bollinger midline at roughly $76.00, while the upper Bollinger Band near $80.85 marks a more distant cap in the event of a sharper short-covering bounce. On the downside, the May 4 low of $72.20 offers the first notable support. A decisive break below this level would expose the lower Bollinger Band at about $71.15. 

(The technical analysis of this story was written with the help of an AI tool.)