Silver (XAG/USD) Price Forecast: Silver Resilience Holds Strong in Anticipation of Jackson Hole
Silver (XAG/USD) Talking Points:
- Silver (XAG/USD) prices remain supported above $23,00 as sentiment remains mixed.
- Jackson Hole Symposium remains a key catalyst for Gold and Silver prices
- US Dollar remains vulnerable, all eyes on the Fed
Silver (XAG/USD) prices currently remain supported above the key psychological level of $23.00, maintaining its resilience ahead of the Jackson Hole Symposium. Due to rising Covid-19 cases, the summit will now be held virtually over the next two days.
Following last week’s FOMC Meeting minutes where the Federal Reserve approached inflationary concerns with a more hawkish tone, Gold, Silver and other safe-haven assets gave back a portion of gains as expectations of tapering were digested by the market, pushing Silver prices to a critical level of support at $22.90.
Since then, the tone has once again turned dovish as rising Covid-19 cases continue to weigh on the economy, placing the Federal Reserve in a tough spot as inflation continues to run hot.
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Silver (XAG/USD) Price Action
A shift in sentiment has seen Silver retreat from the February 2021 high, where prices retested $30.00. But after falling below the 50-period Moving Average on the weekly time-frame, the Moving Average Convergence/Divergence (MACD) has swiftly been making its way back towards the zero line, an indication that Silver bulls have been losing steam.
Silver (XAG/USD) Weekly Chart
Chart prepared by Tammy Da Costa using TradingView
From a shorter-term perspective, the recent bearish rhetoric was further confirmed by the formation of a death cross on the daily time-frame, which provided bears the opportunity to drive prices back to the 38.2% Fibonacci retracement of the 2020 – 2021 move which continues to provide support for the precious metal at $22.90.
As sentiment remains mixed, geopolitical risks and rising Covid-19 cases has continued to support demand for safe-haven Silver, allowing price action to stabilize between the key Fibonacci levels of historical major moves.
Silver (XAG/USD) Daily Chart
Chart prepared by Tammy Da Costa using IG Charts
Should bulls wish to regain dominance over the systemic, prominent trend, a break above the 50% retracement of $25.86 may be required.
Likewise, for the bearish narrative to persist, bears will be required to drive prices below $23.00.
--- Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.