Silver Price Forecast: XAG/USD retraces from daily highs towards $21.90s despite a soft buck

• Silver begins the week on the wrong foot, down 0.57%.
• Sentiment-wise, the market is positive, as reflected by global equities up.
• Silver Price Forecast (XAG/USD): Fluctuating around $21.50-22.50.

Silver (XAG/USD) grinds lower during Monday’s North American session, albeit the US Dollar trading softer in a shorter than usual trading session, as US markets remain closed in the observance the Memorial Day. At the time of writing, the XAG/USD is trading at $21.97, off the $22.00 mark.

A risk-on market mood keeps flowing towards stocks, thus weighing on safe-haven assets like silver. Asian and European equities finished with gains, while US futures rose. The greenback is softer during the day, as illustrated by the US Dollar Index, down 0.31%, sitting at 101.323.

Fed speaking crossed the wires. In Frankfurt, Federal Reserve Governor Christopher Waller said that he advocates 50 bps rate hikes on the table “until we see substantial reductions in inflation. Until we get that, I don’t see the point of stopping.” He added that he supports 50 bps at “several” meetings.

Silver traders need to be aware that on Tuesday, US President Joe Biden and Federal Reserve Chair Jerome Powell will meet for discussions in the White House on the state of the American and global economy.

Monday’s absent US economic calendar would keep traders leaning towards market sentiment. In the week ahead, the US docket would feature May’s ISM Manufacturing and Non-Manufacturing PMIs, the CB Consumer Confidence, and US employment data, led by the Nonfarm Payrolls, ADP report, and Initial Jobless Claims.

Silver Price Forecast (XAG/USD): Technical outlook

On Friday, Silver (XAG/USD) reached a two-week high at around $22.46, and since then, XAG/USD bulls have failed to keep prices above $22.00. That said, the white metal remains to trade in the $21.50-22.50 range, unable to register a successful upward/downward break beyond the boundaries.

Upwards, the XAGU/USD’s first resistance would be $22.00. A breach of the latter would send XAG/USD towards May 27 high at $22.46. Once cleared, the following supply zone would be February 11 low-turned-resistance at $22.86, followed by February 15 low at $23.08.

On the flip side, the xAG/USD first support would be May 26 low at $21.72. Break below would expose May 13 swing low at $21.28, followed b the YTD low at $20.45.

Key Technical Levels