Silver (XAG): Fed Uncertainty Could Challenge 50-Day MA Ahead of Jackson Hole

Silver Holds Key Support as Traders Eye Powell’s Jackson Hole Speech

Silver closed Friday with a minor loss but maintained its position above the critical short-term pivot at $37.87, while holding firm above the 50-day moving average at $37.30. This technical setup keeps the immediate outlook constructive as markets await Federal Reserve Chair Powell’s Jackson Hole commentary for directional cues.

On Friday, XAG/USD settled at $38.00, down $0.01 or -0.03%.

Will Silver Break Above $38.74 Resistance?

The precious metal’s ability to stay above the $37.87 pivot creates potential for upside momentum. Traders are watching for a breakout above the recent minor top at $38.74, which could trigger a test of the 14-year high at $39.53 reached on July 23. That level represents significant psychological resistance after silver’s impressive rally earlier this summer.

Federal Reserve Policy Uncertainty Weighs on Precious Metals

Thursday’s Producer Price Index delivered the biggest monthly gain in three years, dampening market conviction around a September rate cut. CME FedWatch still shows 93% probability for easing, but that’s down from earlier in the week. Silver, like gold, initially sold off on the hot inflation print but found buyers at lower levels, suggesting underlying demand remains intact.

Dollar Weakness Fails to Boost Silver Prices

The U.S. Dollar Index slipped below 98.100 Friday, closing under its 50-day moving average. Typically, dollar weakness provides tailwinds for precious metals, but silver’s muted response reflects trader caution ahead of Powell’s Jackson Hole speech. If the dollar continues losing ground post-Fed commentary, silver could finally capitalize on currency headwinds.

Critical Support Levels Define Near-Term Direction

Silver’s 50-day moving average at $37.30 represents the intermediate trend and has provided reliable support throughout 2024. A sustained break below the $37.87 pivot would signal weakness, potentially driving prices through the minor bottom at $37.51 toward the 50-day average. Further deterioration could target the July 31 main bottom at $36.21, where buyers previously stepped in aggressively.

Market Forecast: Consolidation Above Key Support Creates Upside Potential

Silver remains in a consolidative phase above critical support levels. The metal’s ability to hold $37.30 keeps the intermediate uptrend intact, while a breakout above $38.74 could unleash momentum toward $39.53.

Powell’s Jackson Hole speech will likely provide the catalyst for the next directional move. Traders should view any pullbacks toward the 50-day moving average as potential buying opportunities, provided support holds firm.

More Information in our Economic Calendar.