Silver moves around the $ 26.00 level as markets await Powell’s comments

• Silver is trading negatively around the $ 26.00 level ahead of Fed Chairman Jerome Powell’s comments.
• The precious metals reaction is likely to follow suit in how bond markets react to Powell.

The the payment spot (XAG / USD) has been moving with a negative bias in Thursday’s session So far, although the price action has been subdued compared to how silver normally trades. XAG / USD is currently moving on both sides of the $ 26.00 level, and the price action, for the most part, stays within a narrow range. Markets are understandably on hold ahead of comments from Jerome Powell, chairman of the US Federal Reserve, whose remarks will be released at 5:05 PM GMT.

In general terms, markets remain on hold before Powell. The S&P 500 is currently trading flat as it remains in prior day ranges just above the 3,800 level, 10-year US government bond yields are flat near 1.47% and the US dollar slightly higher, having managed to climb back above the 91.00 level, but remains within this week’s range.

In terms of macroeconomic developments, there is not much to update on. Weekly initial jobless claims matched expectations in the week ending February 27, with 745,000 people applying for benefits for unemployment. Meanwhile, Challenger job cuts fell to 34,500 from 79,500 the previous month.

While Thursday’s employment data has been a bit more optimistic, this is offset by the ISM services PMI employment sub-index and the softer ADP private sector jobs report on Wednesday. So far, the signs of how this Friday’s Official NFP Labor Market Report will arrive have been mixed relative to traditional indicators. At the moment, expectations are that the Bureau of Labor Statistics survey shows that 182,000 new jobs were added to the US economy in February.

On the other hand, markets remain focused on the issues of 1) fiscal stimulus: It appears that the Senate will vote in favor of US President Joe Biden’s $ 1.9 trillion “bailout” package by the end of the week and markets are waiting for the bill to pass. 2) Fed Comments: Markets will be watching Powell’s comments for clues on how the Fed chairman is feeling about the recent rate hike (he wasn’t overly concerned before) and what he thinks might be a response. appropriate from the Fed if yields rise in a “disorderly” manner, 3) the path of the pandemic in the US and elsewhere: News from Europe is getting worse with closures (in Germany) or toughened (in Italy and Greece) as cases rise (according to WHO, European Covid-19 infections increased for the first time in six weeks over the past week ), but the news in the US is improving.

Looking ahead, the main driver on Thursday will, of course, be Fed Chairman Jerome Powell’s remarks. If your comments stimulate buying in the bond market, this will reduce returns and could be bullish for silver (and gold). Conversely, if Powell raises yields, it would be a bearish signal for precious metals.

Silver technical levels