Silver Prices Forecast: XAG/USD Prices Easing in Anticipation of Fed Speeches

Key Points

• Silver prices show slight decline amid Federal Reserve anticipation.
• Resistance at $23.55 hinges on Federal Reserve, economic indicators.
• Bearish market awaits Fed speeches, U.S. CPI data impact.

Silver Price Trends

Silver prices are displaying limited movement on Wednesday, with a slight decline despite lower U.S. Treasury yields and a marginal dip in the U.S. Dollar Index. Market participants are closely monitoring upcoming Federal Reserve speeches for insights into possible shifts in monetary policy.

Presently, silver is without a strong catalyst for significant price movement, but Federal Reserve communications in the near future are under scrutiny along with the anticipation of next week’s U.S. consumer inflation report.

At 07:35 GMT, XAG/USD is trading $22.33, down $0.10 or -0.43%.

Resistance and Support Analysis

Short-term forecasts suggest that if silver maintains above the $22.23 – $21.88 range, it could retest the major resistance level at $23.55, a figure consistent since early January. This potential rise is contingent on the Federal Reserve’s policy decisions and broader economic indicators especially the CPI report.

Federal Reserve’s Influence

Federal Reserve officials have hinted at possible rate cuts if the U.S. economy stays on course. However, they maintain a cautious stance in reducing rates, reflecting a continued focus on inflation control, aligning with Fed Chair Jerome Powell’s recent comments.

Economic Data and Currency Impact

Recent robust U.S. jobs and services sector reports have led to a reassessment of the timing for rate cuts. The slight decrease in the dollar index has rendered silver more appealing to holders of other currencies. Current predictions suggest up to four quarter-point cuts in 2024.

Short-Term Market Forecast

In the near term, silver prices are expected to react to upcoming Federal Reserve speeches and U.S. CPI data. The market currently shows a bearish outlook, with reduced expectations of a rate cut in March. However, signs of easing inflation could pivot the market to a bullish stance, potentially elevating silver prices, while higher consumer inflation may continue to dampen the market. Traders remain cautious, focusing on the Federal Reserve’s guidance and economic data releases to gauge the direction of silver prices.

Technical Analysis

Silver (XAG/USD) is edging lower, while holding slightly above the first level of support at $22.23. The second level and most important is $21.88. If this level fails then look for the start of a steep break with $20.66 the next downside target.

Even if the market holds the support zone at $22.23 – $21.88, it’s going to take some strong buying power to change the intermediate and main trends to up. They are being controlled by the 50-day moving average at $23.43 and the 200-day moving average at $23.42, respectively.

This area along with the static resistance at $23.55 are trigger points for a potential acceleration to the upside.