Silver Price Forecast: XAG/USD stabilizes above $22 on subdued USD Index, US Retail Sales eyed
|- Silver price seems steady above $22 while US Dollar corrects.
- Fed Goolsbee said one-time persistent inflation is insufficient to temper long-term downtrend.
- The US Retail Sales data will guide the Silver price.
Silver price (XAG/USD) manages to shift its auction above the crucial resistance of $22 in the early European session on Thursday as investors digest that rate cuts by the won’t be announced Federal Reserve (Fed) atleast before June. The expectations of a rate cut by the Fed in the May monetary policy meeting have cooled down significantly on the persistent inflation outlook.
S&P500 futures has generated nominal gains in the late Asian session, portraying a marginal improvement in the risk appetite of the market participants. The US Dollar Index (DXY) has corrected gradually to 104.70 from three-month near 105.00. 10-year US Treasury yields have dropped to 4.24%.
On Wednesday, Chicago Fed Bank President Austan Goolsbee said one bad inflation data could not impact the broader trend, which is that price pressures are coming down to the 2% target. When asked about the timing of rate cuts, Goolsbee said the central doesn’t need to wait to reduce inflation to the 2% target to begin reducing the benchmark rates.
In today’s session, investors will focus on the United States Retail Sales data for January, which will be published at 13:30 GMT. The monthly Retail Sales are anticipated to have contracted by 0.1% after expanding 0.6% in December.
Silver technical analysis
Silver price trades in a Descending Triangle Chart pattern on a daily scale, which indicates a volatility contraction but with a negative bias. The 50-day Exponential Moving Average (EMA) near $23 continues to act as a barricade for the Silver price bulls.
The 14-period Relative Strength Index (RSI) consistently discovers support near 40.00. A slippage below the same would trigger a downside momentum.
Silver daily chart
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