Silver Price Analysis: XAG/USD fails to rebound from $23.00 despite weak US GDP data, eyes $22.00

• Silver only saw a very modest bounce from their lowest levels since mid-February under $23.00 after weak US GDP data.
• As US yields move higher and USD remains resilient, XAG/USD remains at risk of t4esting earlier 2022 lows at $22.00.

Spot silver (XAG/USD) prices only saw a very modest bounce from their lowest levels since mid-February under $23.00 in wake of data showing a surprise drop in US GDP in Q1, with the US dollar having pulled back from highs. But any more meaningful rebound does not appear to be forthcoming, with XAG/USD for now still only trading just above the $23.00 mark and still nursing on the day losses of about 1.0%.

The US dollar has been on a rampage higher in recent days with the US Dollar Index (DXY) hitting five-year highs above 103.00 this week and nearing 104.00 earlier on Thursday amid worries about geopolitics, global growth and expectations for aggressive Fed tightening. This has weighed heavily on the precious metal complex, with both silver and gold being battered.

Indeed, at current levels near $23.00, XAG/USD trades with on-the-week losses of nearly 5.0% and trades nearly 12% below last week’s highs above $26.00. Some analysts might interpret the latest US GDP numbers as lessening the likelihood that the Fed in the coming months signals a further hawkish shift in its rate guidance towards outright restrictive interest rates (i.e. above the 2.5% neutral level).

But, for now, markets do not appear to be reading things this way. US yields continue to press higher and the buck looks likely to remain buoyant, perhaps given the latest inflation readings for Q1 that came out alongside the GDP growth figures showed another rise. XAG/USD remains vulnerable to retesting annual lows around $22.00 and returning to Q4 2021 lows in the mid-$21.00s.