The price of silver (XAG/USD) is on the rise, inching closer to $29.30 in the North American session on Friday. Investors are eagerly awaiting Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium, hoping for insights into interest rates and the economic outlook.
With US bond yields under pressure due to expectations of a dovish stance from Powell, silver is benefitting from the declining yields on interest-bearing assets. The lower yields reduce the opportunity cost of holding non-yielding assets like silver.
Meanwhile, the US Dollar Index (DXY) has rebounded to around 101.50, recovering from earlier losses in the day.
Investors are particularly interested in Powell’s guidance on interest rate cuts in September, with the CME FedWatch tool showing a 28.5% probability of a 50 basis points cut and the rest favoring a 25-bps reduction.
Market experts are also looking for clues on the possibility of a “soft landing” in the US economy, following concerns about a potential recession after the recent Nonfarm Payrolls report showed a slowdown in labor demand and an increase in the Unemployment Rate.
Silver technical analysis
After breaking above the August 2 high of $29.20, silver has turned sideways, with the 200-period Exponential Moving Average (EMA) providing support around $28.77. The Relative Strength Index (RSI) suggests a temporary end to bullish momentum, but the overall bias remains positive.
Silver four-hour chart
Silver FAQs
Silver is a precious metal with a long history as a store of value and medium of exchange. Investors often turn to silver to diversify their portfolios, hedge against inflation, or benefit from its intrinsic value. Silver prices can be influenced by geopolitical events, economic conditions, interest rates, and the strength of the US Dollar. The metal is also widely used in industries like electronics and solar energy, impacting its demand and price.