Silver prices (XAG/USD) fell to approximately $72.85 during Asian trading hours on Tuesday, slipping below the key $73.00 level and the 100-day Exponential Moving Average (EMA) as downside pressure persisted in the market [1]. The decline was attributed to intensifying tensions in the Middle East, specifically reports of Iranian attacks on vessels in the Strait of Hormuz, which have driven up crude oil prices and stoked inflation fears [1].
These inflation concerns have led to expectations that the US Federal Reserve may maintain higher interest rates for an extended period, reducing the appeal of non-yielding assets like silver [1]. Minneapolis Fed President Neel Kashkari stated on Sunday that further rate hikes cannot be ruled out, especially as inflation risks remain elevated due to rising energy prices linked to the Iran conflict [1].
From a technical perspective, XAG/USD maintains a bearish near-term bias, trading below both the 100-day EMA and the Bollinger Bands 20-day simple moving average. The Relative Strength Index (14) is around 44, indicating subdued bearish momentum without signaling an oversold condition that might prompt a strong rebound [1]. Key resistance levels are identified at the 100-day EMA ($74.45), the Bollinger midline (approximately $76.00), and the upper Bollinger Band near $80.85. On the downside, the May 4 low of $72.20 serves as the first notable support, with a break below this level exposing the lower Bollinger Band at about $71.15 [1].
No forward-looking analyst opinions beyond Kashkari's comments on potential Fed rate hikes were provided in the article [1].
CONCLUSION
Silver's drop below $73 reflects ongoing market concerns about Middle East tensions and the prospect of prolonged higher US interest rates. Technical indicators suggest continued downside pressure, with key support and resistance levels in focus. The market remains cautious as inflation and geopolitical risks persist.