Silver Price Forecast: XAG/USD seesaws around $23.50 post-Fed taper and Chair Powell conference

Silver (XAG/USD) edges higher post-Fed bond taper announcement, up 0.13%, trading at $23.54 during the New York session at the time of writing. On Wednesday, the Federal Reserve revealed that it would reduce its bond purchasing program in the middle of November. Furthermore, leave the door open that would adjust the pace of its QE reduction program as the central bank’s needed.

It seems investors perceived the US central bank bond tapering announcement as dovish, as portrayed by US equities printing new all-time highs around the New York close. 

Fed’s Chairman Jerome Powell post-Fed press conference remarks

On Wednesday, after revealing the Fed’s QE reduction pace to kick start later in November, Fed’s Chairman Jerome Powell held its press conference. There he said that the central bank could be patient in regards to hiking rates. Further added that in case of needing to tackle heightened prices, he said, “we will not hesitate,” after announcing the scale back by $15 billion of its bond purchasing program.

Chairman Powell reiterated that tapering “does not imply any signal regarding the Fed’s interest rate policy.” Moreover, he noted that the pace would put them on track to finish the pandemic stimulus program in the middle of 2022 but left the door open for adjustments.

Jerome Powell insisted that “we don’t think it is a good time to raise interest rates because we want to see the labor market heal further.”

Concerning inflation, Fed’s Chairman said that it “is elevated,” but it is attributed to supply and demand imbalances related to the COVID-19 pandemic.

XAG/USD Price Forecast: Technical outlook

The white metal is approaching the tops of a bullish flag pattern in the 4-hour chart. Furthermore, the precious metal bounced off the 200-simple moving average (SMA) around $23.09, and rallied $0.50, as the Fed announced the bond taper. Nevertheless, to resume its upward trend, it would need to reclaim the 100-SMA at $23.73.

In the outcome of the above-mentioned, the following resistance area would be the confluence of the $24.00 psychological level and the  50-SMA. A breach of that level could send silver towards 2021 highs around $24.85.

On the flip side, failure at $23.73 would keep USD bulls in control, exposing the $23.00 figure as the first support level before re-testing the $22.00 figure.