Most of the assets erased some of Friday’s losses, but both gold and silver were trading weaker ahead of the US session. with silver dropping nearly half a percent, trading slightly above the 23 USD level.
Markets are trying to shake off from Friday’s sharp selloff as a new COVID variant has been observed. Equities plunged, yields collapsed and silver took a hit as well.
The 23 USD support is now a key zone. If not held, stop-losses of long positions will be destroyed, likely sending the metal further lower. The initial reaction could bring silver toward 22.70.
It looks like the medium-term trend will shift to bearish again as the markets still expect the Fed to hike rates at least two times in the next year.
Alternatively, the resistance is located at 23.70 USD and silver must close above it to eliminate the current bearish threat. The USD is also strengthening today, undermining precious metals.
Later in the day, Federal Reserve Chair Jerome Powell is due to deliver opening remarks at a webinar hosted by the Federal Reserve Bank of New York. His comments could cause volatility in the financial markets.