Silver passes below 2021 and 2022 low levels

Source: Dukascopy Bank SA


The price for silver passed below the support zone of the 2021 and 2022 low levels at 21.50/22.00 on May 10. On that day, the US Dollar strengthened due to the fact that inflation in the US was revealed to had continued to grow and the revelation signaled an incoming increase of monetary tightening by the US Federal Reserve. Namely, the US Dollar strengthened due to the markets seeing indications of its supply being decreased.

During the middle of May, the rate confirmed the previous support zone as resistance. In theory, the commodity price should continue to decline, unless the fundamentals change.

If the price for silver continues to decline, support might be found in the round levels at 21.00 and 20.00, before the price hits the 18.95/19.70 zone. This zone acted as resistance to the price in late 2019 and the first half of 2020. Further below, note that the 18.00 mark was capable of impacting the commodity in 2019 and 2020.

On the other hand, an easing of the monetary policy of the Federal Reserve might cause a surge of the commodity price. A surge would have to pass the 21.50/22.00 zone, prior to facing the resistance of the 23.00 mark and the 50 and 200-day simple moving average near 23.50.
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