Silver Price Forecast: XAG/USD falls close to 8% in the week as bears eye $22

• Silver losses almost 8% in the week, the biggest fall in the year.
• The greenback posts its best week since June 2021, with the DXY steady at 97.251.
• The XAG/USD stills downward pressured, and a break below $22.35 would expose $22.00 and beyond.

Silver (XAG/USD) looks forward to finishing its worst week in the year, slumping for six consecutive days, trading at $22.39 at the time of writing. That said, the white metal accumulates losses of 7.90% in the week, the largest since November 2021, when it shed 5.90% of its value.

King dollar is back, gaining 1.70% in the week, the largest since June 2021

The US dollar is the main gainer of the week. So far, the US Dollar Index, a gauge of the greenback’s value against a basket of its rivals, advances 1.70% in the week, sitting at 97.251. It is the biggest gain since June 2021 in the week when the US central bank favorite gauge of inflation, the Personal Consumption Expenditure (PCE), rose to 4.9%, the highest level reached since June 1982.

On Friday, the US Bureau of Economic Analysis reported that the Core Personal Consumption Expenditure (PCE) for December, the Fed’s favorite gauge of inflation, rose by 4.9%, 0.1% higher than expected, and left behind the 4.7% reported in November.

Meanwhile, investors appear to be rebalancing their portfolios after the FOMC monetary policy meeting. Even though the monetary policy statement was perceived as a “hawkish hold,” the market’s reaction was null. However, when Fed Chair Jerome Powell expressed at his press conference that “the committee is of a mind to raise the federal funds rate at the March meeting,” the stock sell-off began

Before Wall Street opened, Minnesota Fed President Neil Kashkari hit the wires. He said that the Fed needs to bring the US economy in balance by raising interest rates. Kashkari noted that the central bank does not know how many increases will take and emphasized that the Fed would be adjusting as more data comes in.

XAG/USD Price Forecast: Technical outlook

Silver is downward biased, though USD bulls are struggling to break an upslope trendline drawn from December 2021 lows up to January ones that pass around the $22.35-50 area. In the event of a test of the latter, that would send XAG/USD tumbling towards January 7 cycle low at $21.94, followed by December 2021 lows at $21.42.