Silver Price Forecast: XAG/USD rises to near $29.30 with Fed Powell’s speech under spotlight

• Silver price gains to near $29.30 in the countdown to Fed Powell’s speech.
• Jerome Powell is expected to provide fresh cues on interest rates and the economic outlook.
• US bond yields remain under pressure on firm Fed rate cut prospects.

Silver price (XAG/USD) rises to near $29.30 in Friday’s North American session, with investors focusing on the Federal Reserve (Fed) Chair Jerome Powell’s speech at the Jackson Hole (JH) Symposium. The white metal gains as bond yields decline on expectations that Jerome Powell will deliver a dovish guidance on interest rates.

10-year US Treasury yields fall to near 3.84%. Lower yields on interest-bearing assets bode poorly for non-yielding assets, such as Silver, given that they reduce the opportunity cost of holding an investment in them.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, recovers its intraday losses and rebounds to near 101.50.

Market participants are optimistic about Powell’s dovish guidance but they want more clarity on the likely size of interest rate cuts in September. According to the CME FedWatch tool, 30-day Federal Funds Futures pricing data shows that the probability of 50 basis points (bps) interest-rate cut in September is 28.5%. While rest is favoring a 25-bps interest rate reduction.

Investors will also focus on Powell’s speech to know about whether chances of ‘soft landing’ are intact. Market experts started anticipating a potential United States (US) recession after the Nonfarm Payrolls (NFP) report for July indicated a sharp slowdown in the labor demand and an increase in the Unemployment Rate to 4.3%, the highest level seen since November 2021.

Silver technical analysis

Silver price turns sideways after a decisive break above August 2 high of $29.20, which faltered the lower high lower low formation on a four-hour timeframe. The 200-period Exponential Moving Average (EMA) near $28.77 acts as cushion for Silver price bulls.

The 14-period Relative Strength Index (RSI) falls to near 60.00, suggesting that the bullish momentum has concluded for now. However, the bullish bias remains intact.

Silver four-hour chart