Silver Price Forecast: XAG/USD turns volatile around $24 as Fed keeps room open for more rate hikes

Silver price (XAG/USD) turns volatile with the crucial support of $24.00 in the early New York session. The white metal remains sideways as uncertainty about commentary Federal Reserve (Fed) chair Jerome Powell escalates. The situation of decent consumer spending, the tight labor market environment, and declining inflationary pressures have elevated uncertainty about interest rates.

S&P500 opened on a positive note ahead of Jerome Powell’s commentary at Jackson Hole. The US Dollar Index (DXY) corrects gradually to near 104.00 as investors remain uncertain about Powell’s commentary.

Jerome Powell stated in commentary that interest rates can be raised further if data remains encouraging. About the labor market, Fed Powell believes that the job market is not cooling enough and could warrant further policy action.

Meanwhile, Philadelphia Fed Bank President Patrick Harker supports sustaining interest rates at the 5.25% to 5.5% range. Harker sees no rate cuts this year.

Silver technical analysis

Silver price forms a Bullish Flag chart pattern on a two-hour scale, which is a trend-following pattern. The white metal consolidates above $24.00, portraying an inventory accumulation by institutional investors from retail participants. The 20-period Exponential Moving Average (EMA) is consistently providing support to the Silver bulls.

The Relative Strength Index (RSI) (14) trades in the bullish range of 60.00-80.00, which indicates that the upside momentum is intact.

Silver two-hourly chart