Silver – XAG/USD remains vulnerable near $75 as oil prices hold weekly gains
- Silver price remains under pressure as the Oil price reflects strength amid the Hormuz closure.
- Major central banks are scheduled to announce their monetary policy next week.
- The Fed is expected to hold interest rates steady in the range of 3.50%-3.75%.
Silver price (XAG/USD) trades with caution near its 10-day low around $75 during the Asian trading session on Friday. The white metal has been under pressure as oil prices reflect strength due to the prolonged closure of the Strait of Hormuz, a critical passage to almost 20% of global energy supply.
During the press time, the WTI Oil price clings to gains near $95.00, the highest level seen in over a week.
Higher oil prices have remained a key drag on the Silver price, as they have prompted inflation expectations globally, which have discouraged central banks from turning dovish on the monetary policy outlook.
The event of steady or tight monetary conditions by global central banks bodes poorly for non-yielding assets, such as Silver.
Going forward, investors will focus on monetary policy announcements from a number of global central banks next week, including the Bank of Japan (BoJ), the Federal Reserve (Fed), and the European Central Bank (ECB).
The Fed is expected to leave interest rates unchanged in the range of 3.50%-3.75% and guide that the central bank will remain vigilant to upside inflation risks prompted by geopolitical tensions.
Silver technical analysis
XAG/USD trades lower below $75, maintaining a bearish near-term tone amid a breakdown of the Ascending Triangle formation on the daily chart. The break under the supportive upward-sloping border of the above-mentioned chart pattern suggests sellers retain control while the Relative Strength Index (14) at 45.26 stays below the midline, hinting at lacklustre upside momentum rather than an oversold condition.
Looking down, the April 13 low at $72.61 is the immediate support for the Silver price; a decisive break below this level would expose it towards the April 7 low of $68.28. On the topside, the initial hurdle is the upward-sloping border near $79.30, and only a sustained move above this level would widen the scope of further upside towards the horizontal barrier of the above-mentioned pattern around $83.35.
