Silver Price Forecast: XAG/USD Tumbles After Hitting 12-Year Peak, Bearish Engulfing Looms

By Christian Borjon Valencia of FX Street

Editor • Oct 23, 2024 at 7:20 PM EDT

Silver price retreats after posting a multi-year high at $34.86, yet erases more than Tuesday’s gains, and is down over 3.30 percent.

Silver, Bars, 5000 Grams, Real Value

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Silver price drops sharply, erasing Tuesday's gains, driven by profit-taking and a rise in US Treasury yields.
A daily close below $33.78 could confirm a ‘bearish engulfing’ pattern, signaling potential for deeper pullback to $32.95 and $32.51.
For a bullish continuation, buyers need to reclaim the $34.00 level and retest the year-to-date high at $34.86.

Silver price retreats after posting a multi-year high at $34.86, yet erases more than Tuesday’s gains, and is down over 3.30 percent. At the time of writing, the XAG/USD trades at $33.66, sponsored by higher US Treasury yields and a strong US Dollar.

XAG/USD Price Forecast: Technical outlook

Silver price reversed its course on Wednesday, after printing 12-year peak. The Relative Strength Index (RSI) tumbled after reaching overbought conditions, an indication that longs were booking profits. Sellers moved in and capitalized on that move due to a mean reversion play.

If XAG/USD records a daily close below October 22 low of $33.78 it would confirm a ‘bearish engulfing’ chart pattern and pave the way for a deeper pullback. In that outcome, Silver’s first support would be October 4 swing high at $32.95. A breach of the latter will reveal the May 20 peak at $32.51, followed by the October 17 low of $31.32.

For a bullish continuation, buyers must clear the $34.00 psychological figure, before challenging the YTD high at $34.86.

XAG/USD Price Chart – Daily

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