Silver Price Forecast: XAG/USD hovers around $31 ahead of Fed Powell’s speech

• Silver price trades in a tight range near $31 amid uncertainty over China’s third plenum outcome.
• Firm Fed rate-cut hopes keep the near-term outlook of the Silver price as bullish.
• Investors await Fed Powell’s speech for fresh guidance on interest rates.

Silver price (XAG/USD) consolidates in a tight range near $31.00 in Monday’s North American session. The white metal struggles for direction as investors await Federal Reserve (Fed) Chair Jerome Powell’s speech at the Economic Club of Washington scheduled at 16:30 GMT.

The commentary from Fed Powell will indicate about when the central bank will start reducing interest rates. Currently, financial markets are confident that the Fed will pivot to policy-normalization from September. Strong speculation for Fed rate cuts in September have weighed heavily on the US Dollar (USD) and bond yields.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, sees more downside below the immediate support of 104.00. 10-year US Treasury yields rose to 4.22% but are close to near four-month low. Low interest rate environment is unfavorable for the US Dollar and bond yields.

Despite firm Fed rate cut prospects, the near-term outlook of the Silver price is uncertain due to the ongoing four-day China’s third plenum meeting, which is scheduled for next week. China’ Communist Party is expected to take measures to boost real estate and manufacturing sector.

Meanwhile, China’s weaker-than-expected Q2 Gross Domestic Product (GDP) growth has deepened uncertainty over Silver’s demand as a metal used in industry in manufacturing and automobile sectors.

Silver technical analysis

Silver price holds the breakout of the Falling Channel chart formation on a daily timeframe.  Advancing 20-period Exponential Moving Average (EMA) near $30.30 continues to provide support to the Silver price bulls.

The 14-period Relative Strength Index (RSI) struggles to break above 60.00. A decisive break above the same would push the momentum toward the upside.

Silver four-hour chart