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Silver price tanks below $19.00 on Powell’s remarks, sour sentiment

  • Silver price prepares to finish the week with losses of 0.64%.
  • Fed’s Chair Powell reiterated the US central bank goal of bringing inflation down, even if it generates “pain to households and businesses.”
  • Upbeat US economic data weighed on the white metal prices, plummeting more than $0.30.

Silver price tumbles from around weekly highs around $19.42, back below the $19.00 figure after Fed’s hawkish rhetoric finally takes its toll on the market’s erroneous perception of a Fed pivot. That, alongside positive US economic data, underpinned the greenback, a headwind for the white metal price. Therefore, XAG/USD is trading at $18.86 a troy ounce at the time of writing.

US equities are plunging after Jerome Powell’s saying that the Fed’s primary goal is bringing inflation to its 2% goal even if it spurs slow growth and “pain to households and businesses.” He added that “without price stability,  the economy does not work for anyone.”

The US Dollar Index, a gauge of the buck’s performance against a basket of six currencies, gains more than 0.30%, set to finish the week above the 108.800 figure, while US Treasury bond yields are climbing, led by the short-end of the curve, with 2s up two and a half bps, at 3.398%. In the meantime, the US 10-year benchmark note sits at 3.039%, almost flat.

Fed’s favorite gauge of inflation edges lower, as well as American inflation expectations

In the meantime, the US Bureau of Economic Analysis reported that inflation in the US measured by the PCE slid to 6.3% YoY, less than estimates of 7.4%. Excluding volatile items like food and energy, the so-called Core PCE slowed to 4.6% YoY, lower than expectations of 4.7%.

Later, the University of Michigan’s Consumer Sentiment final release for August arrived at 58.2, upward revised from 55,1 preliminary reported, up from estimations of 55.2. Even though it’s a good reading, inflation expectations were the main spotlight. Americans expect inflation to top around 4,8% in the one-year horizon vs. 5% preliminary. Inflation is estimated to peak within five years at around 2.9% vs. 3% preliminary.

What to watch

In the next week, the US economic calendar will feature US CB Consumer Confidence, ISM Manufacturing PMI, the ADP Employment report and the Nonfarm Payrolls.

Silver (XAG/USD) Daily chart

XAG/USD

Overview
Today last price18.86
Today Daily Change-0.38
Today Daily Change %-1.98
Today daily open19.24
 
Trends
Daily SMA2019.95
Daily SMA5019.83
Daily SMA10021.27
Daily SMA20022.48
 
Levels
Previous Daily High19.4
Previous Daily Low19.11
Previous Weekly High20.88
Previous Weekly Low19.03
Previous Monthly High20.37
Previous Monthly Low18.15
Daily Fibonacci 38.2%19.29
Daily Fibonacci 61.8%19.22
Daily Pivot Point S119.1
Daily Pivot Point S218.96
Daily Pivot Point S318.8
Daily Pivot Point R119.4
Daily Pivot Point R219.55
Daily Pivot Point R319.69

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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