Silver price eased for the second session in a row after hitting a three-week high earlier in the week. This is as the financial markets remain cautious ahead of the Fed chair’s speech and overall Jackson Hole Symposium later in the day. The event is expected to highlight interest rate expectations for the rest of the year. While the metal is set for its second week of gains, a hawkish Fed and stronger US dollar may continue to exert pressure on the asset.
Fundamentals
In the latest FOMC meeting minutes, most officials remained concerned over the upside risks of inflation. The central bank holds a hawkish stance with further interest rate hikes being something that can’t be ruled out.
Similar to the other precious metals, an environment of higher interest rates is bearish for silver price. Granted, investors expect the Fed to hold the current rates in its September meeting.
Silver price technical analysis
Silver price is set to record its second consecutive week even as its gains remain curbed by a stronger US dollar. This is after being in the red for four straight weeks; dropping to a two-month low earlier last week at 22.27.
Earlier in the week, it rebound above the crucial zone of 23.00 to a three-week high at 24.35. It has since erased some of those gains to 24.05 as at the time of writing.
A look at its daily chart shows the metal trading above the 25 and 50-day exponential moving averages. Even so, I expect it to remain under pressure in the short term. Since early May it has had lower highs and lower lows.
Based on these indicators, I am of the opinion that the psychological level of 25.00 will remain evasive to the bulls for a while longer. More specifically, silver price may remain within a range of between 24.45 and 23.60.
