Silver Price Forecast: XAG/USD displays volatility contraction near $23, following subdued US Dollar

Silver Price Forecast: XAG/USD displays volatility contraction near $23, following subdued US Dollar
  • Silver price volatility compresses near $23.00 while the US Dollar remains subdued.
  • Investors turn baffled between rising hopes of the Federal Reserve’s (Fed) soft landing and resilient US dollar.
  • Silver price consolidates below the 61.8% Fibonacci retracement at $23.30.

Silver price (XAG/USD) demonstrates a volatility squeeze near the crucial support of $23.00, following the footprints of the subdued US Dollar. The white metal struggles to find a direction as investors turn baffled between rising hopes of the Federal Reserve’s (Fed) soft landing and resilient US dollar due to deepening global uncertainties.

The S&P500 opens on a positive note as investors start digesting fears of global economic shakedown due to rising interest rates by central banks. The US Dollar Index (DXY) turns sideways around 105.00 after a stalwart rally. More upside remains favored on hopes that the US economy is approaching to golden path.

Chicago Fed Bank President Austan Goolsbee said the central bank is aiming to push the economy to a “golden path,” meaning a situation where inflation recedes without triggering a recession. While strong wage growth is still a major concern for the Fed as higher disposable income could elevate inflationary pressures.

Meanwhile, investors await the US Consumer Price Index (CPI) data for August, which will be published on Wednesday at 12:30. Investors will keenly watch core inflation data as it has remained extremely stubborn due to strong consumer spending momentum.  

Silver technical analysis

Silver price consolidates below the 61.8% Fibonacci retracement (plotted from August 15 low at $22.23 to August 30 high at $25.00) at $23.30 on an hourly scale. The 50-period Exponential Moving Average (EMA) at $23.13 continues to act as a barricade for the Silver price bulls.

The Relative Strength Index (RSI) (14) shifts into the 40.00-60.00 range from the bearish range of 20.00-40.00, which indicates that the bearish momentum has faded. While the bearish bias has not faded yet.

Silver hourly chart

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *