Silver Price Daily Forecast – Volatility After Powell’s Jackson Hole Speech

Silver Video 27.08.20.

The Fed Will Aim To Push Inflation Above 2% To Support The Economy

Silver made an attempt to get above the nearest resistance at $27.75 after Fed Chair Jerome Powell stated that the Fed will target an average inflation rate of 2% over time.

Currently, Inflation Rate and Core Inflation Rate are significantly below 2% so Powell’s statement means that the Fed will tolerate inflation above 2% and will not rush to raise rates in case it sees that inflation is accelerating.

This is exactly what the markets wanted to hear. Precious metals got an immediate boost while the U.S. dollar found itself under pressure.

The U.S. Dollar Index, which was near the 93 level before Powell’s speech, tried to settle below 92.50 but did not manage to gain more downside momentum on its first attempt to get below the nearest support level and rebounded back to 93.

In case the U.S. Dollar Index gets below 92.50, silver and other precious metals will receive additional support.

Gold also rallied after Powell’s comments but is currently pulling back from recent highs.

Gold/silver ratio has recently made an attempt to gain more downside momentum and tried to settle below the 71 level. This attempt was not successful so gold/silver ratio remains in the current range between 71 and 73.

In case gold/silver ratio moves below 71 and gets to the test of August lows at 69.50, silver will get an additional boost.

Technical Analysis

Silver tried to settle above the resistance at $27.75 but this attempt was not successful. The market is very volatile right now so silver may get to another test of this resistance level soon.

In case silver manages to settle above $27.75, it will gain more upside momentum and head towards the next resistance level at $28.50. A move above $28.50 will open the way to the test of August highs at $29.85.

On the support side, the nearest material support level for silver is located at the 20 EMA at $26.20. There’ll be a lot of interest in silver in case it manages to get below the 20 EMA since such a move would signal that the current upside momentum has come to an end.

In this scenario, silver will gain more downside momentum and head towards the next support level at $24.95.

For a look at all of today’s economic events, check out our economic calendar.